Breaking: China Greenlights Historic First Crypto Stablecoin Launch

Beijing shakes up global finance—state-backed digital dollar alternative gets the nod.

After years of crypto crackdowns, China pivots hard with a yuan-pegged stablecoin play. No more mining bans—now they're minting.

Wall Street analysts already placing bets on how long until the 'Digital Silk Dollar' undercuts Tether's dominance. (Spoiler: they brought the full force of the PBOC's forex reserves to this knife fight.)

One hedge fund manager quipped: 'Finally, a stablecoin that might actually be stable—if you ignore the whole capital controls thing.'

Chen Lin, director of the Centre for Financial Innovation and Development at the University of Hong Kong, says that China as a whole has become very interested in crypto, especially stablecoins. Around the globe, the stablecoin market has been embraced as a healthy competitor to fiat currencies. The digitalization of traditional currency is becoming more popular on a federal level, with institutional interest worldwide also rising.

China to Launch New Stablecoin

Back in June, China’s central bank governor, Pan Gongsheng, said that stablecoins had “fundamentally reshaped the traditional payment landscape”. Financial regulators in the past two months have discussed trends and strategies for cryptocurrencies and stablecoins, according to participants and official statements. One unnamed participant reportedly said, “Any stablecoin project implemented in China must be compatible with the country’s specific national conditions.”

Since April, taxi drivers in Hong Kong have already beento cash or bank cards. The issuance and launch of an official Chinese stablecoin will be a big addition to China’s crypto efforts alongside the pre-existing Digital Yuan. “HKMA’s priority is stability and control at launch, so initial programs are expected to focus on business-to-business applications, limiting their initial adoption,” said Paul Tang, director of the Hong Kong Money Service Operators Association, an industry group.

Multiple state-owned enterprises with Hong Kong operations are looking to apply for stablecoin licences. However, per FT, among China’s four dominant state-owned banks, only one will receive a licence from the HKMA initially. “It’s quite challenging to compete with the US dollar-backed stablecoin system,” said Chen Lin, director of the Centre for Financial Innovation and Development at the University of Hong Kong. “Certainly, Hong Kong is making its own efforts, but there’s still a long way to go.”

A timetable for the Chinese stablecoin launch hasn’t been announced.