China is reportedly planning to roll out renminbi-backed stablecoins in a bid to challenge the dominance of the U.S. dollar, according to a recent Financial Times report. While the initiative is gaining momentum, concerns over capital outflows are delaying its launch.
The move comes as Chinese officials explore stablecoin technology as a strategic response to the global influence of dollar-backed tokens like Tether and Circle. By developing its own stablecoins, China hopes to reduce reliance on traditional cross-border payment networks like SWIFT—systems the government fears could be compromised in the event of geopolitical tensions with the U.S.
Over the past two months, Chinese financial regulators have engaged with industry experts to examine how best to design, issue, and pilot renminbi-pegged stablecoins. However, insiders note a potential conflict between the open nature of blockchain technology and China’s strict financial controls.
One participant involved in the discussions stated that any stablecoin initiative would need to align with China’s “specific national conditions,” indicating tight regulatory oversight.
Despite this push, China continues to maintain a firm stance against cryptocurrency activity. Since the comprehensive ban on crypto trading and mining implemented in September 2025, the country has aimed to keep its financial system insulated from global crypto markets. That same caution may ultimately pose a significant barrier to its stablecoin ambitions.
China’s central bank is particularly concerned about the potential impact stablecoins could have on capital outflows, especially their possible use in money laundering activities.
Rebecca Liao, CEO of blockchain infrastructure firm Saga, noted that stablecoin technology is inherently resistant to centralized control—posing a significant challenge for a government that prioritizes tight oversight of capital movement.
“Stablecoins can’t be centrally controlled,” Liao told the Financial Times. “When they invest in this technology, it will inevitably be taken to places they do not like.”
This lack of control could make it difficult for Chinese authorities to monitor or regulate the flow of funds facilitated by a renminbi-backed stablecoin, further complicating the project’s future.
China fears being left behind in the global stablecoin race
Following the introduction of Hong Kong’s Stablecoin Ordinance bill, major financial and tech firms—including JD.com, Animoca Brands, and Standard Chartered—are actively seeking stablecoin issuer licenses.
The interest isn’t limited to Hong Kong-based companies. Chinese institutions and digital enterprises are also increasingly eager to obtain stablecoin issuance rights. However, sources familiar with the matter revealed that among China’s four major state-owned banks, only one is expected to receive a license in the Hong Kong Monetary Authority’s (HKMA) first approval round.
Notably, the HKMA has not ruled out granting licenses for renminbi-backed stablecoins, signaling potential support for yuan-pegged digital assets.
Since early July, Chinese regulators have been engaged in internal discussions about easing the country’s rigid stance on digital assets. The accelerating global momentum around stablecoins—paired with growing pressure from domestic companies and experts—has prompted talks of officially supporting yuan-based stablecoin development.
The regulatory spotlight on stablecoins isn’t limited to China and Hong Kong. In the United States, the proposed GENIUS Act has brought stablecoins to the forefront of monetary innovation. Meanwhile, South Korea is also making strides. Leading digital payment companies like KakaoBank and NaverPay have expressed strong interest in launching won-pegged stablecoins.
Most recently, South Korean firms fanC and Initech debuted a pilot for a won-backed stablecoin, though a full public launch has yet to follow.
