On July 5, 2025, a seemingly distant fintech term—'What is a stablecoin'—unexpectedly topped the trending list on Chinese Douyin. In a country that strictly prohibits cryptocurrency trading and mining, this phenomenon undoubtedly sends a strong signal. It is like a stone thrown into a calm lake, creating ripples that quickly spread from the professional financial circle to millions of internet users' screens, triggering a phenomenon of 'national science popularization.'
This is not just a random trending event. Behind it is a dramatic shift in the global financial landscape, a competition between major powers for digital currencies, and a profound question: are stablecoins, viewed as 'on-chain dollars,' leading cryptocurrencies in an unprecedented manner from the gray area 'wilderness' into the mainstream financial arena, heralding their historic moment of 'normalization'?
The trending 'stablecoin'
This storm sweeping through Chinese public opinion originates from across the Pacific. In June 2025, the U.S. Senate historically passed the (GENIUS Act), paving the way for the compliance of US dollar stablecoins, which is seen as the 'first shot' in the U.S. for stablecoin compliance. Following this, the stock price of US dollar stablecoin issuer Circle skyrocketed nearly 7 times after its listing on the NYSE, and traditional giants like Amazon and Walmart are also considering launching their own stablecoins.
This series of actions, in the eyes of Chinese policymakers and analysts, is nothing short of a meticulously designed 'strategic plan.' A report from Morgan Stanley sharply points out that stablecoins are not a brand-new currency, but a 'new distribution channel' for existing sovereign currencies. Currently, over 97% of the global stablecoin market is pegged to the US dollar, which means that every cross-border payment, transaction, and settlement involving stablecoins essentially expands the influence of the dollar and indirectly increases the demand for U.S. Treasury bonds.
For China, which is striving to promote RMB internationalization, this undoubtedly brings great strategic anxiety. Former Governor of the People's Bank of China Zhou Xiaochuan publicly warned that US dollar stablecoins could further promote global 'dollarization,' eroding the monetary sovereignty of other countries. Xiaofeng, chairman of Wanxiang Blockchain, also noted that the goal of US dollar stablecoins is to maintain the dollar's status as the global mainstream currency, and its impact on China is at a stage that requires proactive response.
Faced with the U.S.'s increasing pressure, a long-standing hardline attitude towards cryptocurrencies in China shows signs of 'softening.' A grand debate is quickly unfolding from officials to civilians, from entrepreneurs to economists:
A subtle official shift: In June 2025, People's Bank of China Governor Pan Gongsheng publicly mentioned stablecoins for the first time at the Lujiazui Forum, acknowledging their potential in reshaping traditional payment systems and shortening cross-border payment chains, and pointed out that emerging technologies can help address the risks of traditional payment systems being 'politicized.'
Corporate giants are taking action: Ant Group and JD Group have successively announced that they will apply for stablecoin licenses in major currency countries worldwide, hoping to reduce global cross-border payment costs by 90%. Meanwhile, it is rumored that these two groups are also actively lobbying the Chinese central bank to issue offshore RMB stablecoins in Hong Kong.
A collective call from academia and think tanks: Many top scholars and national think tanks, including former Vice President of the Chinese Academy of Social Sciences Li Yang and Professor Deng Jianpeng from the Central Political and Legal Affairs University, have issued statements calling for China to avoid missing technological revolution opportunities due to policy lag while adhering to the bottom line of financial security and to actively participate in rule-making.
The trending topic on Douyin is a reflection of this nationwide introspection projected onto the public level. It signifies that the issue of stablecoins has transitioned from discussions in ivory towers to becoming a focal point of public attention.
So, what exactly is this 'stablecoin' that has intrigued millions of internet users and is at the center of great power competition? Simply put, it is a cryptocurrency pegged to fiat currencies like the US dollar and the Chinese yuan, aimed at maintaining price stability. Based on the type of collateral, it can be mainly divided into:
Fiat-backed: Such as USDT and USDC, which have equivalent bank deposits and short-term government bonds as 1:1 reserve support.
Crypto-backed: Such as DAI, which maintains price stability through over-collateralization of Bitcoin, Ethereum, and other crypto assets.
Algorithmic: Cryptocurrencies that maintain price stability through algorithmic mechanisms (such as automatic supply adjustments, arbitrage models, etc.), whose value does not rely on traditional asset collateral. However, the collapse of Terra UST has exposed its design flaws, ringing alarm bells for the market.
However, the true potential of stablecoins goes far beyond 'stability.' A report from top venture capital firm a16z points out that stablecoins, due to their fast, almost zero-cost, and programmable characteristics, have become the best tool for building global fintech. They are seen as a 'trillion-dollar opportunity' capable of solving real-world problems: providing financial tools for 1.4 billion people worldwide who lack access to banking services and reducing cross-border remittance fees, which can be as high as 13%, to nearly zero.
The chess game in Hong Kong
In the face of the strong rise of US dollar stablecoins and strict capital controls domestically, China has found an excellent strategic fulcrum—Hong Kong. Hong Kong's Financial Secretary Paul Chan explicitly stated that Hong Kong is cautiously advancing the development of stablecoins, reflecting its role as a 'firewall' and 'testing ground' under the 'one country, two systems' framework.
The Hong Kong Monetary Authority has announced that the (Stablecoin Regulation) will officially take effect on August 1, 2025, and will begin accepting license applications from issuers, making it the first financial center in the world to provide a clear licensing mechanism for stablecoins. This framework not only applies to HKD or USD stablecoins but also reserves space for issuing stablecoins pegged to offshore RMB.
International investment banks like Morgan Stanley generally believe that China's most likely strategy is to use Hong Kong as a pilot for offshore RMB stablecoins. This strategy could explore a new, more efficient, and low-cost cross-border payment path while not impacting the financial stability of the mainland, utilizing Hong Kong's deep offshore RMB liquidity pool, thus providing a new engine for RMB internationalization.
An unavoidable global competition
In summary, the fact that 'What is a stablecoin' topped Douyin's trending list is no coincidence. It is a microcosm of an era, marking a complex financial innovation that, driven by multiple forces, has finally broken through barriers and entered the public's view.
Looking globally, from the U.S. (GENIUS Act) to the EU (MiCA regulations), to the regulatory frameworks in Hong Kong, South Korea, and Singapore, stablecoins are undergoing a profound transformation from 'wild expansion' to 'institutional dominance.' The core of this transformation is the competition among countries for dominance over future digital financial infrastructure.
For China, this is a competition that cannot be absent. From strict prohibition to encouraging exploration, the shift in attitude is driven by defensive considerations to counter the extension of dollar hegemony and proactive planning to achieve 'leapfrog development' through new technologies.
For the general public, this means that cryptocurrencies are entering our lives in a more pragmatic, compliant, and closely integrated way with the real world. The path to the 'normalization' of stablecoins may just be beginning, but the financial revolution it leads is already unstoppable.