US Policy Group Warns of China’s Fear of USD Stablecoins

The Council on Foreign Relations (CFR) has highlighted the geopolitical implications of stablecoins, particularly USD-backed tokens, as the US GENIUS Act aims to legitimize them as regulated money. With banks ensuring one-to-one redemption, stablecoins could soon rival traditional cash equivalents, potentially circulating up to $1.75 trillion within three years. This development threatens to reinforce the dollar's global dominance.

Beijing views this shift as a direct challenge to its monetary sovereignty. Stablecoins' combination of dollar liquidity and blockchain portability could circumvent China's capital controls, undermining the Communist Party's economic leverage. Export-driven firms may adopt stablecoins to reduce transaction costs, further marginalizing the renminbi in key markets. Chinese researchers and state media have echoed these concerns, framing the issue as existential for the nation's financial autonomy.