China is preparing to launch its first renminbi (RMB)-pegged stablecoin through Hong Kong, aiming to internationalize the yuan and challenge the dominance of US dollar-backed stablecoins like Tether's USDT. The initiative, led by the People's Bank of China (PBOC) and Hong Kong Monetary Authority (HKMA), involves tech giants including JD.com and establishes a regulated framework under Hong Kong's crypto-friendly legislation.
PBOC Governor Pan Gongsheng emphasized that stablecoin development must adhere to China's specific conditions, stating: "Any stablecoin development in the country must adhere to the country's specific conditions" and "is subject to government approval, especially regarding offshore circulation." The project targets cross-border trade settlements and could reshape Asia's DeFi infrastructure by providing RMB alternatives for institutional finance.
Historical attempts like Tether's failed CNH stablecoin faced regulatory hurdles, but Hong Kong's evolving framework increases the initiative's viability. The move may erode USD stablecoin market share, particularly impacting USDT, while enhancing RMB usage in global transactions through streamlined payment systems.