China’s Tech Titans Launch Yuan-Backed Stablecoins in Bold Move to Dethrone the Dollar

Beijing's blockchain brigade fires the latest salvo in the currency wars.

Alibaba-affiliated Ant Group and Tencent-backed entities are rolling out CNY-pegged digital assets—just as the BRICS nations escalate de-dollarization efforts. These aren't your grandma's stablecoins: full PBOC integration means real-time settlement and Xi-approved compliance baked into every transaction.

The dollar won't surrender its reserve status without a fight, but for once, Wall Street's quants might actually need to learn Mandarin.

TLDR

• JD.com and Ant Group are lobbying China’s central bank to allow yuan-backed stablecoins to challenge US dollar dominance in digital payments
• The yuan’s share of global payments fell to 2.89% in May, while the US dollar holds 48% of global payment share
• Both companies plan to apply for stablecoin licenses in Hong Kong and Singapore to launch offshore yuan tokens
• Hong Kong will implement new stablecoin licensing rules starting August 1 as part of its digital asset framework
• The current stablecoin market is worth over $258 billion but could reach $2 trillion by 2028 according to Standard Chartered

JD.com and ANT Group are leading a push to convince Chinese regulators to approve yuan-backed stablecoins. The two tech giants want to counter the growing dominance of US dollar-pegged digital currencies.

The companies met with officials from the People’s Bank of China (PBOC) in private sessions. They argued that yuan stablecoins are needed urgently to promote the currency’s international use.

The proposals focus on stablecoins backed by offshore yuan that WOULD launch in Hong Kong. This approach would strengthen the yuan’s role in global trade while limiting the dollar’s influence.

JD.com executives received positive early feedback from regulators about their plans. The company has proposed starting yuan stablecoin issuance in Hong Kong before expanding to China’s free trade zones.

Both companies are preparing to apply for stablecoin licenses in Hong Kong and Singapore. JD.com plans to launch a Hong Kong dollar-pegged stablecoin by year-end.

The yuan’s share of global payments dropped to 2.89% in May, its lowest level in nearly two years. The US dollar maintains a commanding 48% share of global payments according to Swift data.

Market Dynamics Drive Urgency

Wang Yongli, former deputy head of Bank of China, warned that inefficient yuan payments pose a strategic risk. He said China faces problems if cross-border yuan payments remain less efficient than dollar stablecoins.

The current stablecoin market is worth over $258 billion according to CoinMarketCap data. All of the top 10 stablecoins by market cap are dollar-denominated.

Standard Chartered projects the stablecoin market could grow to $2 trillion by 2028. More than 99% of existing stablecoins are tied to the US dollar according to the Bank for International Settlements.

Chinese exporters increasingly prefer USDT for cross-border settlements over traditional yuan payments. This trend has accelerated tech giants’ efforts to issue their own stablecoins.

Hong Kong Framework Enables Launch

Hong Kong announced new digital asset regulations last week centered on stablecoin oversight. The region will implement a licensing regime for stablecoin issuers starting August 1.

The new framework aims to facilitate real-world use cases for stablecoins. It includes legal clarity, ecosystem growth, adoption and talent development components.

JD.com founder Liu Qiangdong said in June the company plans to apply for stablecoin licenses in all major sovereign currency countries. This statement came after PBOC Governor Pan Gongsheng announced plans for an international digital yuan operations center in Shanghai.

Gongsheng said China envisions a “multipolar” currency system where multiple currencies support the global economy. This contrasts with the current system dominated by the US dollar and euro.

Ant Group is pursuing licenses in Hong Kong, Singapore, and Luxembourg to expand its blockchain payment infrastructure. The company wants to broaden its reach across multiple jurisdictions.

EURC, pegged to the euro, is currently the largest non-dollar stablecoin ranking 11th by market cap. The development shows limited success so far for alternatives to dollar-backed tokens.