China leverages its 90% control of global rare earth processing to incentivize RMB stablecoin adoption, offering 0.5-1% discounts that make transactions significantly cheaper than dollar-based alternatives.
The Belt and Road Initiative creates a $2.5 trillion trade network across 140+ countries, providing the perfect ecosystem for RMB stablecoins to flourish through reduced settlement fees.
Hong Kong’s position as the world’s third-largest financial hub enables HKD stablecoins to overcome Western resistance to RMB, offering regulatory clarity and new digital investment opportunities.
Discover China’s strategic plan to challenge dollar stablecoin dominance through rare earth trading, Belt and Road Initiative, and Hong Kong’s blockchain finance. Learn how this digital currency war impacts investors in Asia and beyond.
INTRODUCTION: THE BATTLE FOR DIGITAL CURRENCY SUPREMACY
Four centuries ago, Spanish silver dominated global trade, forging a currency empire that ruled the world. Today, stablecoins, the “digital cash” of our era, have surged to a $200 billion market cap, transforming global transactions. Dollar stablecoins struck first, capturing 80% of the market! But China is not standing idly by, wielding RMB and HKD stablecoins to challenge the dollar’s digital throne.
As a novice investor in Hong Kong or Taiwan, are you curious about China’s strategy to reshape the market? How will this digital currency war shape the future? Join us as we unravel this ultimate game plan from history to tomorrow! This article is for informational purposes only and not investment advice.
DOLLAR STABLECOIN CHALLENGES: WHY RMB AND HKD STABLECOINS ARE NEEDED
Dollar stablecoins (like USDT and USDC) dominate 80% of market transactions but pose three major issues for China and Hong Kong:
1. U.S. Control Over Transactions: Businesses using dollar stablecoins face U.S. regulations (e.g., OFAC sanctions). A politically motivated account freeze can halt transactions—like using someone else’s bank card that could be locked at any moment.
2. Costly and Slow Conversions: Hong Kong firms receiving USDT must convert to USD, then HKD, incurring 0.7-1% fees and 2-3 day delays. For instance, a Hong Kong e-commerce business getting USDT payments faces high costs and delays to cover rent in HKD.
3. RMB’s Limited Global Reach: The dollar accounts for 58% of global forex reserves (International Monetary Fund – Currency Composition), while the RMB holds just 2.5%. Chinese firms are often forced to use dollars, adding fees and exchange rate risks—like wanting to pay in HKD but being told only USD is accepted.
RMB and HKD stablecoins address these issues. RMB stablecoins enable faster, cheaper Belt and Road Initiative (BRI) trades; HKD stablecoins leverage Hong Kong’s global trust to attract users, together reducing dollar dominance. But how can these stablecoins gain worldwide acceptance? Let’s turn to history for answers.
HISTORICAL LESSONS: THE SECRETS OF RESOURCE AND NETWORK DOMINANCE
How do currency empires rise? Three historical tales reveal the blueprint:
Four hundred years ago, Spain controlled 80% of the world’s silver from South American mines, spreading silver dollars via Manila galleons—even China’s Ming Dynasty collected taxes in it.
In the 1800s, Britain used textile and railway tech, backed by London banks and colonies, to promote the pound, secured by gold.
Since the 1900s, the U.S. has relied on oil trade and military might, making the dollar 58% of forex reserves.
The secret? Control key resources (silver, machinery, oil) and transaction networks (galleons, colonies). What resources and networks can China use to build stablecoin dominance today?
CHINA’S 3 KILLER MOVES: RARE EARTHS, BELT AND ROAD, AND HONG KONG BLOCKCHAIN FINANCE
We propose three strategies for China to promote RMB and HKD stablecoins, challenging dollar stablecoin hegemony by seizing key resources or transaction networks:
1. Rare Earth Trading:
Key Resource: Per the 2024 International Energy Agency (IEA) report, China controls 90% of global rare earth refining, fueling electric vehicles and AI chips—akin to Spain’s silver.
Why It Works: Rare earths are tech’s lifeblood; subsidized settlements lure buyers, boosting stablecoin adoption.
How It’s Done: Offer 0.5-1% discounts for RMB stablecoin settlements. For example, a Malaysian firm buys rare earths with RMB stablecoins, paying just 0.1% in fees versus 0.7% for dollar settlements. HKD stablecoins assist, appealing to buyers hesitant about RMB.
2. Belt and Road Initiative (BRI):
Transaction Network: In 2024, BRI trade hit $2.5 trillion across 140+ countries, resembling Spain’s galleon network.
Why It Works: Massive trade volumes create stablecoin use cases; low-cost settlements drive circulation.
How It’s Done: Use RMB stablecoins for major project settlements. For instance, a BRI port project in Pakistan pays Chinese firms with RMB stablecoins at 0.1% fees; HKD stablecoins handle smaller Hong Kong business trades.
3. Hong Kong Blockchain Finance:
Transaction Network: The 2024 Hong Kong Monetary Authority report notes Hong Kong, the world’s third-largest financial hub, handles 4% of cross-border payments. Its global network links Asia and the West, like London’s banks, with efficient settlements (instant) and high trust (linked exchange rate system).
Why It Works: As a top financial hub with vast user bases and networks, Hong Kong can integrate traditional products (e.g., bonds, trade finance) into blockchain, incentivizing HKD stablecoin settlements to attract global users and boost adoption.
These moves leverage rare earths (key resource) and BRI and Hong Kong financial networks (transaction networks) to promote RMB and HKD stablecoins, mirroring historical currency dominance.
HOW RMB AND HKD STABLECOINS SUPPORT CHINA’S STRATEGY
How do RMB and HKD stablecoins divide roles to support China’s three strategies? Here’s their synergy:
RMB Stablecoins: Powering Rare Earths and BRI:
Why for Rare Earths and BRI?: Backed by China’s economy (2024 GDP ~$18 trillion), they’re ideal for large-scale trade. 0.5-1% discounts promote RMB internationalization, cutting dollar reliance (58% forex reserves). Rare earths and BRI need robust economic backing, making RMB stablecoins the best fit.
Example: A Pakistani firm uses RMB stablecoins for a BRI railway payment, with 0.1% fees; a Malaysian company buys rare earths, saving 0.7% versus dollar fees.
Limitation: RMB holds just 2.5% of forex reserves, and Western resistance limits its use.
HKD Stablecoins: Advancing Hong Kong Blockchain Finance:
Why for Blockchain Finance?: Hong Kong, a global financial hub, boasts a vast transaction network and 4% cross-border payment share. Its linked exchange rate (HKD to USD at 7.75-7.85) ensures stability, and independent judiciary builds trust. By 2025, with robust stablecoin regulations, HKD stablecoins will settle digital bonds and trade finance, with 0.3% fees and instant transfers, drawing global investors and firms.
Example: International investors buy Hong Kong digital bonds with HKD stablecoins for stable returns, bypassing USDT; Hong Kong firms pay Southeast Asian suppliers with 0.3% fees.
Limitation: Hong Kong’s economy is small (2024 GDP ~$400 billion), and HKD circulation is low (0.1% forex reserves), unfit for large trades.
Synergy: United Against Hegemony:
RMB stablecoins target rare earths and BRI large trades, creating transaction ecosystems; HKD stablecoins promote blockchain finance, attracting global financial users, with funds flowing between them to amplify impact.
HKD stablecoins use Hong Kong’s neutrality (independent judiciary) to sidestep RMB’s political barriers, drawing Western users and indirectly supporting BRI and rare earth trades.
Through these strategies, the stablecoins reduce U.S. transaction controls, cut conversion costs, and boost RMB internationalization, enhancing China’s financial autonomy and global influence.
Hong Kong’s blockchain finance not only aids global settlements but also opens new opportunities for investors, worth watching for novices.
HONG KONG BLOCKCHAIN FINANCE’S INVESTMENT POTENTIAL
Hong Kong’s blockchain finance offers fresh opportunities, especially for novice investors. Investors in Hong Kong should monitor which traditional financial products the HKMA and institutions bring to blockchain to seize potential prospects. We predict three likely products:
Digital Bonds: Issued by banks, offering stable yields (around 3-5% annualized), settled in HKD stablecoins with 0.3% fees. For example, you invest in digital bonds via regulated exchanges, saving on dollar conversion costs.
Trade Finance Tokens: Short-term financing for SMEs, with high liquidity and moderate risk, ideal for steady returns.
Real Estate Tokens (RWA): Hong Kong properties tokenized into digital assets, with low entry barriers (thousands of HKD), enabling real estate appreciation exposure.
How do these impact you? Novices can explore these blockchain finance trends to stay ahead.
WHAT CAN NOVICE INVESTORS WATCH FOR?
This article is for informational purposes only, not investment advice. Consider tracking these:
Hong Kong Regulatory Updates: 2025 stablecoin laws may spark new projects—check HKMA announcements (Hong Kong Monetary Authority – Stablecoin Issuers) or news.
China Market Trends: Rare earth incentives or BRI plans could drive stablecoin demand.
Hong Kong Blockchain Finance: Study regulated exchanges’ digital bonds, trade finance tokens, or real estate token projects to grasp HKD stablecoin use cases.
CONCLUSION: THE NEW DIGITAL CURRENCY KING?
China harnesses rare earths, BRI, and Hong Kong blockchain finance to propel RMB and HKD stablecoins, challenging the dollar’s 80% market dominance! RMB targets trade, HKD sparks financial innovation, together rewriting the currency future. History shows resources and networks crown winners—will China claim the throne? Novice investors, dive into stablecoin trends and ride the digital wave! Who will reign supreme? Share your predictions in the comments and spark a debate with friends!
〈Battle for Digital Dominance: How China’s RMB and HKD Stablecoins Challenge the Dollar’s $160 Billion Crypto Empire〉這篇文章最早發佈於《CoinRank》。
