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

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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.

Ripple Applies for U.S. National Bank Charter to Advance Crypto Integration

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Crypto firm Ripple has submitted an application for a U.S. national bank charter, aiming to deepen its integration with the traditional financial system and gain regulatory clarity, CEO Brad Garlinghouse announced on Wednesday. This move follows a similar step by stablecoin issuer Circle, signaling growing momentum among crypto firms to enter the regulated banking space.

Obtaining a national charter from the Office of the Comptroller of the Currency (OCC) would enable Ripple to settle payments more quickly and at lower costs by reducing reliance on intermediary banks. The OCC confirmed receipt of Ripple’s application. Additionally, Ripple is seeking a Federal Reserve Master account to directly access the Fed’s payment infrastructure and hold stablecoin reserves with the central bank, as Garlinghouse detailed on social media.

Ripple’s stablecoin, RLUSD, launched in October 2024, currently holds a market value near $470 million, placing it among the larger stablecoins, though still smaller than dominant players like Tether and Circle’s USD Coin. The timing aligns with increased regulatory attention on stablecoins, particularly after the U.S. Senate passed the GENIUS Act, which industry experts say will foster safer adoption by clarifying regulations.

Circle also recently applied for a national trust bank charter shortly after its strong IPO, reflecting a broader industry push to legitimize and scale crypto payment systems through traditional finance channels.

Grayscale, a major digital asset manager, praised the GENIUS Act, stating it is likely to enhance stablecoin adoption in the U.S. while maintaining safeguards for consumers and financial stability.

Coinbase Seeks SEC Approval to Offer Tokenized Stocks on Blockchain

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Coinbase is pursuing approval from the U.S. Securities and Exchange Commission (SEC) to offer tokenized equities—digitally represented stocks traded on blockchain technology—to its customers, according to Paul Grewal, Coinbase’s chief legal officer.

If approved, Coinbase would enter direct competition with retail brokers like Robinhood and Charles Schwab by allowing users to trade stocks in token form. This new service could open a significant business segment for the crypto exchange.

What Are Tokenized Equities?

Tokenized equities convert traditional shares into digital tokens, enabling investors to hold and trade ownership rights on a blockchain network. Advocates argue that tokenization can:

  • Reduce trading costs

  • Enable faster settlement of trades

  • Allow 24/7 trading outside conventional market hours

Challenges and Regulatory Context

Despite enthusiasm, the concept faces hurdles, including limited secondary-market liquidity and the absence of global regulatory standards, as highlighted by a recent World Economic Forum report.

Currently, U.S. law requires securities trading platforms to be registered as broker-dealers. Coinbase previously faced an SEC lawsuit for allegedly operating as an unregistered broker-dealer, but the case was dropped this year under the Biden administration.

To move forward, Coinbase needs a “no-action letter” or exemptive relief from the SEC—an assurance that the SEC would not take enforcement action if Coinbase offers tokenized stock trading.

Grewal emphasized that such regulatory clarity is vital for boosting institutional adoption of crypto and blockchain technologies.

Market Context

  • Coinbase’s competitor Kraken recently launched tokenized U.S. equity tokens, called xStocks, but only outside the U.S.

  • The SEC under President Trump has adopted a more industry-friendly approach, dropping several lawsuits against crypto firms and creating a task force for digital asset regulation.

No official submission date or launch timeline for Coinbase’s tokenized equities service has been disclosed.