China is making waves in the world of finance with its strategic move to explore the use of fiat-referenced stablecoins (FRS) as a tool for internationalizing the renminbi (RMB). While the mainland continues to uphold its ban on cryptocurrency trading and mining, Hong Kong has emerged as a controlled testing ground for RMB-linked stablecoins, following the implementation of a licensing regime for stablecoin issuers on August 1, 2025.
The State Council in China is reportedly reviewing a draft roadmap that could potentially allow RMB-linked stablecoins for global payments, marking a significant departure from its previous stance of hostility towards privately issued digital assets. This shift in policy signals a new approach towards leveraging stablecoins to enhance the RMB’s presence in cross-border settlements.
The Hong Kong Monetary Authority (HKMA) has taken proactive steps to regulate stablecoin issuers, requiring them to adhere to strict licensing and prudential standards. Licensed issuers must maintain a 1:1 reserve backing, ensure timely redemption, and implement robust governance and risk controls to safeguard investor interests.
The stringent customer identification requirements imposed by the HKMA have raised concerns among industry players, with some highlighting potential adoption frictions for retail users. However, institutional participants view these measures as a means to enhance trust and confidence in the stablecoin market, particularly in facilitating large-scale transactions and credit extensions.
The limited initial issuance of stablecoin licenses in Hong Kong underscores a cautious approach towards the rollout of RMB-linked stablecoins, with a focus on B2B use cases such as trade settlement. Recent developments, including China’s directive to pause real-world asset tokenization in Hong Kong, underscore the evolving regulatory landscape and the need for issuers to navigate policy risks effectively.
Outside Hong Kong, the launch of the first regulated offshore CNH stablecoin in Kazakhstan by fintech AnchorX highlights growing interest in RMB-linked tokens beyond Hong Kong’s jurisdiction. Major Chinese tech groups, including Ant Group and JD.com, are exploring opportunities to issue offshore RMB stablecoins, driven by the potential for streamlined trade finance and faster settlement processes.
Stablecoins have the potential to revolutionize cross-border payments by enabling faster and more cost-effective transactions. While the dominance of the US dollar in the stablecoin market remains significant, China’s efforts to promote RMB-linked stablecoins could pave the way for a more diversified global payment ecosystem.
As China navigates its dual-track approach of maintaining control on the mainland while fostering innovation in Hong Kong, the success of RMB stablecoins will hinge on factors such as offshore issuance, redemption credibility, and regulatory cooperation. While challenges persist, the emergence of RMB stablecoins signals a significant step towards reshaping the international financial landscape.
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References:
– Finance Magnates: https://www.financemagnates.com/cryptocurrency/from-hong-kong-to-global-trade-chinas-bid-to-put-the-rmb-on-the-stablecoin-map/
– Cointelegraph: https://cointelegraph.com/news/s-p-global-taps-chainlink-rate-stablecoins-ability-to-retain-peg?utm_source=rss_feed&utm_medium=rss&utm_campaign=rss_partner_inbound
– Cointelegraph: https://cointelegraph.com/news/tether-celsius-299m-settlement-stablecoin-liability?utm_source=rss_feed&utm_medium=rss&utm_campaign=rss_partner_inbound
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