China’s Tech Giants Push for Offshore Yuan Stablecoin to Challenge USDT’s Dominance

In a bold move that could reshape the future of digital finance, two of China’s biggest tech players—JD.com and Alibaba’s Ant Group—are calling on the People’s Bank of China (PBOC) to approve the launch of a yuan-pegged stablecoin in Hong Kong. 

This initiative is seen as a strategic effort to counter the overwhelming dominance of U.S. dollar-backed stablecoins like USDT, which have become the go-to option for cross-border crypto payments and settlements.

With the global stablecoin market expanding rapidly and political pressure mounting, China’s window to act is narrowing. The yuan’s role in the digital currency space could either grow significantly—or continue to fall behind.

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Why Is China Pushing for an Offshore Yuan Stablecoin?

1. Curbing USDT’s Digital Dominance

Over 99% of stablecoins in circulation today are backed by the U.S. dollar, according to the Bank for International Settlements. 

This gives the U.S. an outsized influence in the evolving digital economy. Chinese exporters are increasingly settling international transactions in USDT, bypassing yuan settlements altogether and deepening the dollar's hold.

2. Hong Kong as a Gateway

JD.com and Ant Group are already preparing to issue HKD-backed stablecoins under Hong Kong’s new crypto regulatory framework, launching August 1. However, because the Hong Kong dollar is pegged to the U.S. dollar, these tokens do little to support yuan internationalization.

By enabling yuan stablecoin issuance in Hong Kong, China could sidestep its own crypto ban while still gaining exposure in global markets.

3. A Strategic Response to U.S. Momentum

The U.S. is rapidly building legal clarity around stablecoins. President Donald Trump, back in office, has expressed support for stablecoins and is accelerating a nationwide regulatory framework. 

China’s response, spearheaded by its tech giants, signals urgency to protect its monetary sovereignty in the digital realm.

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Beijing’s Dilemma: Embrace or Fall Behind

While China officially banned cryptocurrency trading and mining in 2021, it has maintained a strong interest in central bank digital currency (CBDC) development through its digital yuan (e-CNY) project. 

However, the global appetite for decentralized stablecoins is growing much faster than adoption of central bank-issued alternatives.

Some key stats:

• Yuan share of global payments fell to 2.89% in May 2025 (SWIFT)

• US dollar share remains dominant at 48.46%

• Stablecoin trading volumes in USDT from Chinese clients on Hong Kong OTC platforms have increased fivefold since 2021

Industry experts warn that without swift action, the yuan could become irrelevant in the digital trade ecosystem.

Read Also: Flash News: Stablecoins are Only a Means of Payment, Not a CBDC, Fed Governor Says

A Glimpse Into the Future: Offshore Yuan Stablecoin

The proposed yuan-pegged stablecoin, if approved, could:

• Expand China’s influence in global trade and DeFi ecosystems

• Reduce reliance on USDT in cross-border settlements

• Serve as a policy-friendly alternative to traditional cryptocurrencies

• Enable Chinese exporters to avoid capital controls while still operating within regulatory bounds

JD.com has proposed a pilot program for yuan stablecoin issuance in Hong Kong, followed by controlled expansion into China’s free trade zones. Sources say early feedback from regulators has been “well received.”

Meanwhile, Ant Group is reportedly preparing license applications for stablecoin operations in Hong Kong and Singapore, laying the groundwork for a regional push.

Conclusion

The race for stablecoin dominance is no longer just about crypto—it’s about global financial power. With the U.S. moving quickly to legitimize dollar-backed stablecoins, China’s response could define the next phase of monetary competition. 

If JD.com and Ant Group succeed in launching a yuan-pegged stablecoin offshore, it would mark a pivotal shift in how Beijing engages with digital assets.

The yuan's future in global trade now hinges not just on central bank policy, but on how fast China’s private sector and regulators can adapt to the rapidly evolving digital economy.

Read Also: Kakao Pay Plans to Launch Korean Won Stablecoin, Business Layout Has Been Designed

FAQ

Why do JD.com and Ant Group want a yuan stablecoin in Hong Kong?

To challenge the dominance of USDT in global trade and promote the international use of the yuan.

Is the yuan stablecoin legal in mainland China?

Cryptocurrencies are banned in mainland China, but Hong Kong operates under separate financial laws that allow such experiments.

Why isn’t an HKD stablecoin enough?

The HKD is pegged to the U.S. dollar, so it does not help promote yuan usage globally.

How much of the stablecoin market is dollar-based?

More than 99% of stablecoins are currently backed by the U.S. dollar.

Will this affect Bitcoin or other cryptocurrencies?

While not directly, a successful yuan stablecoin could reshape how cross-border crypto payments are settled in Asia.