Chinese Tech Giants Lobby for Offshore Yuan Stablecoin to Challenge U.S. Dollar Dominance

Chinese technology leaders JD.com and Ant Group are pressing the People’s Bank of China (PBOC) to authorize yuan-pegged stablecoins issued in Hong Kong, aiming to boost the international use of the Chinese currency and counter the growing influence of U.S. dollar-linked stablecoins. This push reflects a strategic effort to expand the yuan’s role in global digital finance and cross-border payments amid increasing competition with the U.S.

Stablecoins are cryptocurrencies pegged to stable assets like fiat currencies. Currently, over 99% of stablecoins are linked to the U.S. dollar, and their blockchain-based technology allows fast, low-cost, and borderless transactions, potentially disrupting traditional financial systems. The global stablecoin market is valued at about $247 billion and is expected to grow to $2 trillion by 2028.

Both JD.com and Ant Group plan to launch stablecoins backed by the Hong Kong dollar following the region’s new legislation effective August 1. However, they argue that yuan-based stablecoins issued offshore—particularly in Hong Kong—are urgently needed to promote the yuan’s internationalization. This would mark a significant policy shift in Beijing’s stance on cryptocurrencies, which were banned domestically in 2021.

Industry voices, such as Wang Yongli of Digital China Information Service Group and former Bank of China official, highlight the strategic risks of the yuan falling behind the dollar in cross-border payments. Currently, the yuan’s share of global payments has dropped to 2.89%, far below the dollar’s dominant 48.46%.

The lobbying coincides with Hong Kong and the U.S. racing to establish regulatory frameworks for stablecoins. Chinese exporters increasingly use dollar-pegged stablecoins like Tether (USDT) due to capital controls and currency volatility risks at home, fueling demand for alternative payment tools.

While the PBOC has yet to officially respond, advisors and officials acknowledge the challenges posed by the digital currency surge and have hinted that offshore yuan stablecoins are under consideration. Ant Group is preparing to seek stablecoin licenses in Hong Kong and Singapore, with JD.com planning similar applications globally to facilitate foreign exchange and cross-border payments.

JD.com also points out that pegging stablecoins to the Hong Kong dollar—tied to the U.S. dollar—does little to promote the yuan’s use, thus proposing a yuan stablecoin issuance pilot first in Hong Kong, then expanded to China’s free trade zones, a suggestion reportedly well received by regulators.