USDT and the Shifting Dynamics of China’s Stablecoin Strategy

China's central bank has historically viewed global stablecoins as a threat to monetary systems. However, the rapid adoption of private-sector stablecoins like Tether's USDT and Circle's USDC across Asia has forced a reevaluation. These dollar-pegged assets are now integral to regional financial infrastructure, particularly in areas like supply-chain financing. As of July 2025, Beijing's initial skepticism has transformed into a sense of urgency, driven by the growing dominance of the U.S. dollar in Asian finance through these stablecoins. This shift underscores the evolving landscape of digital assets and their increasing role in global financial systems.

China's Growing Urgency Toward Stablecoins Amid U.S. Dollar Dominance

China's central bank once viewed global stablecoins as a threat to monetary systems, but the landscape has shifted. Private-sector stablecoins like Tether's USDT and Circle's USDC now underpin financial infrastructure across Asia, streamlining processes such as supply-chain financing. Beijing's skepticism is evolving into urgency as these dollar-pegged assets further entrench the greenback in regional finance.

Animoca Group President Evan Ayuang notes accelerating Chinese interest in stablecoins, framing it as a response to dollar hegemony. The People's Bank of China's earlier warnings about cross-border capital FLOW risks now compete with pragmatic recognition of stablecoins' operational efficiencies. This tension reflects broader geopolitical currents in digital asset adoption.

Tether Plans U.S. Expansion Under New Stablecoin Law with Institutional Focus

Tether, the world's largest stablecoin issuer, is strategically positioning itself for growth in the U.S. following the enactment of the GENIUS Act. CEO Paolo Ardoino confirms the company is developing a regulated stablecoin product tailored for institutional payments, interbank settlements, and trading infrastructure. "We are well in progress of establishing our U.S. domestic strategy," Ardoino stated, emphasizing the focus on efficiency and compliance.

The expansion complements Tether's robust presence in emerging markets, where demand for USDT continues to surge. Unlike competitor Circle, which recently went public, Tether remains committed to operating as a private entity while forging regulated partnerships. USDT maintains its dominance as the most traded digital asset globally, underscoring Tether's pivotal role in crypto markets.

Tether Freezes $1.6M USDT Linked to Terrorism Financing

Tether has taken decisive action by freezing $1.6 million in USDT tied to wallets associated with BuyCash, a Gaza-based terrorist financing network. This MOVE aligns with a broader U.S. Department of Justice case targeting $2 million in digital assets used to fund designated terrorist organizations.

Over the past year, Tether has blocked more than $2.9 billion in USDT connected to illicit activities. The company has collaborated with over 275 law enforcement agencies globally, reinforcing its commitment to combating financial crime and maintaining the integrity of the cryptocurrency ecosystem.