Китайский юань-стейблкоин: амбиции и реальность Translation: Chinese Yuan Stablecoin: Ambitions and Reality

China is unlikely to launch a mass-market stablecoin pegged to the yuan. Among the reasons for this are the limited availability of offshore assets and stringent capital controls, as reported by The Economist.

On August 20, it was revealed that Beijing is contemplating allowing the use of stablecoins backed by the national currency. Journalists referred to this decision as a response to the GENIUS Act—a stablecoin bill signed by U.S. President Donald Trump in July.

However, at the beginning of August, Chinese financial regulators demanded that brokerage firms and analytical centers cancel seminars and refrain from publishing studies about stablecoins.

Cryptocurrency trading has been banned in China since 2021, making Hong Kong a testing ground for experiments with digital assets. On August 1, new legislation regarding stablecoins came into effect in this region.

In 2024, Hong Kong implemented a «regulatory sandbox» where companies like JD.com and Standard Chartered are currently experimenting with stablecoins for cross-border payments.

In theory, crypto assets pegged to offshore yuan could help promote the Chinese currency on the global stage.

In practice, however, the small scale of the market poses significant challenges: analysts at Morgan Stanley noted that the pool of yuan-denominated deposits in Hong Kong is less than 1 trillion yuan, while on the mainland, this figure reaches 300 trillion yuan. This limits the availability of liquid assets to back stablecoins.

Another issue is the strict control over money movement that China has instituted to protect its economy. Transferring large sums abroad or freely converting them into other currencies can be quite difficult.

Regulators believe that stablecoins could create a loophole in these rules, allowing capital to bypass restrictions and leave the country uncontrollably. This is why Beijing opposes such initiatives.

Even in the more liberal atmosphere of Hong Kong, authorities are prioritizing stablecoins denominated in Hong Kong dollars (pegged to the U.S. dollar) when issuing the first licenses, instead of yuan, to avoid risks to the financial system of mainland China.

According to the International Monetary Fund (IMF), in 2024, Chinese users purchased stablecoins worth $18.6 billion, primarily through Binance. This points to a significant demand for digital assets that the authorities cannot fully regulate.

The widespread adoption of a yuan-based stablecoin could exacerbate capital flight, undermining financial stability, which raises concerns among regulators.

The Economist argues that even with a successful launch, a stablecoin tied to the Chinese national currency would struggle to compete with dollar-denominated counterparts due to geopolitical risks and the yuan’s limited convertibility.

In mid-August, Bloomberg suggested that China’s weak economic indicators might spur growth in the altcoin market.