Author: Bian Wanli
The popularity of stablecoins remains high, with focus gradually shifting towards practical application scenarios. Recently, market news has emerged that Yiwu already has cases of accepting stablecoin payments for foreign trade goods, making it once again a focal point of public attention.
Huatai Securities research report shows that 'in the world's small commodity center, Yiwu, stablecoins have become an important tool for cross-border payments. The blockchain analysis company Chainalysis estimates that the on-chain stablecoin flow in Yiwu market will exceed 10 billion USD in 2023.' Some people have also posted online, 'Over 3,000 merchants in Yiwu are using USDT and other stablecoins for payments, with monthly transactions exceeding 1 billion USD, directly saving nearly 10 million RMB in fees!'
So, what is the real situation regarding the use of stablecoins in Yiwu?
To investigate further, a reporter from the 21st Century Business Herald delved into Yiwu to conduct field research on the usage of stablecoins.
When asked whether stablecoin payments can be used, most merchants stated that they had not heard of stablecoins and did not understand; some merchants raised doubts about compliance and costs; only a few merchants supported stablecoin payments.
Most merchants say they do not understand stablecoins.
Yiwu International Trade City is the largest small commodity distribution center in the world. Since the first generation of small commodity markets began in 1982, it has undergone six relocations, ten expansions, and five transitions, gradually developing into its current scale. Data shows an operating area of over 6.4 million square meters, with 75,000 business units; gathering 26 major categories and over 2.1 million types of small commodities; every year, more than 560,000 overseas merchants come to Yiwu for procurement, and over 15,000 overseas merchants from more than 100 countries and regions choose to reside in Yiwu, with their products exported to 233 countries and regions worldwide.
Yiwu International Trade City Photo / 21st Century Business Herald
Yiwu International Trade City Photo / 21st Century Business Herald
Stepping into Yiwu International Trade City, visitors come and go incessantly, but the heated phenomenon of stablecoin usage rumored in the market has not been observed. A reporter, posing as a consumer, inquired with merchants whether stablecoins or U (the colloquial term for stablecoins USTD, USDC) could be used for payment. The majority of merchants' first reaction was: 'What payment?', 'What is U payment?', 'I don't know, I don't understand stablecoins, I've never heard of them.'
So-called 'stablecoins' are a type of digital asset that maintain their value stability by being pegged to reserve assets (such as fiat currency like the US dollar). Compared to traditional cryptocurrencies like Bitcoin and Ethereum, their prices are linked to low-volatility assets and are not directly determined by market supply and demand. This stability makes them tools for payment and value storage in on-chain ecosystems.
Since digital currency transactions have no geographical restrictions and are less regulated than traditional finance, the convenience of 'stablecoin' cross-border transfers is relatively strong. For example, traditional cross-border wire transfers usually take 2-3 working days and have high transfer fees. In comparison, USDT (a type of stablecoin) has a transaction delay of about 2 minutes and low transfer fees. This is also a core reason why some market participants are optimistic about the cross-border use of stablecoins.
During the reporter's visit, some merchants expressed interest in stablecoins or had some understanding of them.
Some foreign trade merchants admitted that some overseas buyers have asked whether they can use USTD or USDC for payments.
A merchant with a study abroad background told the reporter, 'I pay attention to stablecoins, but I haven't used them yet.'
Some merchants also said, 'The costs are too high, we don't use them.'
Other merchants raised the question, 'Is it compliant? Will my account be frozen?'
However, there are indeed a few merchants who explicitly stated that stablecoin payments are accepted, but they were unwilling to provide more details.
Multiple informed sources pointed out that it is possible for individual foreign trade merchants with wallets (specifically virtual currency wallets) to privately use stablecoins for transactions. For example, some merchants who trade cryptocurrencies may have stablecoins and a certain demand for them. Some merchants need to find U merchants (intermediaries engaged in the dual exchange business of fiat currency and stablecoins) to convert them into fiat currency (USD or RMB).
A local bank practitioner in Yiwu told the reporter, 'In the past two years, some intermediaries have emerged in Yiwu, purchasing USDT stablecoins at prices below 1 USD, for example, 0.98-0.99 USD, and then selling them to merchants in need of stablecoins at prices above 1 USD, for example, 1.03 USD. Indeed, some merchants have a demand, especially when doing business with buyers from countries and regions with significant currency exchange rate fluctuations, occasionally they will use them.' For merchants, exchanging fiat currency for stablecoins and converting stablecoins back to fiat currency will also incur costs.
There are rumors online that 'over 3,000 merchants in Yiwu are using USDT and other stablecoins for payments, with monthly transactions exceeding 1 billion USD', 'In the world's small commodity center, Yiwu, stablecoins have become an important tool for cross-border payments', and 'it is estimated that the on-chain stablecoin flow in Yiwu market will exceed 10 billion USD in 2023.' In response, a person in Yiwu who has been following virtual currencies for a long time said, 'As far as I know, there are no large-scale stablecoin usage situations among merchants in Yiwu, at least the people around me are not willing to settle using stablecoins.'
Another entrepreneur focused on cross-border e-commerce admitted, 'It's possible that some cross-border e-commerce use stablecoin payments, but most should still be using traditional banks or third-party payment methods for settlement.'
The reporter noticed that recently an investor asked Yiwu Small Commodity City (SH600415) on the interactive platform: 'I heard an expert mention on a stablecoin forum that 30% of the transaction volume in Yiwu small commodities is using stablecoin USDT. Can you provide information on whether this data is accurate, and if not, what the current situation of the company in this regard is.'
The company responded: 'Our company operates the largest small commodity trading market in the world, maintaining trade relations with over 230 countries and regions, among which trade with countries participating in the Belt and Road Initiative accounts for a relatively high proportion, naturally possessing numerous high-frequency cross-border trade settlement scenarios. The company actively explores using financial technology to enhance trade facilitation levels. Innovative payment tools such as stablecoins have the potential to provide more efficient and cost-effective cross-border payment solutions for global merchants, especially small and medium-sized enterprises, aligning with our mission to serve real trade. The company is committed to combining its substantial advantages in real trade scenarios with financial technology innovation to create greater value for global merchants and contribute to the circulation of daily consumer goods.'
At the same time, the small commodities city also stated that currently, the company does not have information on the usage of stablecoins in the Yiwu market and related data. If there are any relevant developments, investors should pay attention to the company's subsequent announcements.
The use of stablecoins is influenced by multiple factors.
Emerging technologies like blockchain and distributed ledgers promote the robust development of central bank digital currencies and stablecoins, achieving 'payment equals settlement', fundamentally reshaping the traditional payment system and significantly shortening cross-border payment chains. Compared to traditional cross-border payment models, the core advantage of stablecoins is that they directly bypass the multi-layered intermediary structure based on agency actions in the traditional model, thereby shortening settlement time and saving transaction costs.
Specifically, stablecoins facilitate peer-to-peer value transfers through a shared distributed ledger, compressing processes that would normally require multiple institutions into a single or a few on-chain transactions, thus shortening settlement times from several days to minutes or even seconds, and reducing costs to predictable network transaction fees. At the same time, in terms of cost structure, the traditional system relies on networks like SWIFT, involving communication fees, foreign exchange hedging costs, and liquidity reserve costs, whereas stablecoins rely on blockchain structure, minimizing transaction costs.
Although stablecoins have many advantages in cross-border payment scenarios, large-scale implementation is not as bustling as envisioned.
Merchants like Chen Jun (a pseudonym), who has long been following virtual currencies, said, 'Foreign trade enterprises benefit from export tax rebates through traditional settlement methods, which provides incentives, leading merchants to be unwilling to use stablecoins.'
In simple terms, export tax rebates mean that the state refunds the value-added tax and consumption tax that enterprises have already paid during production and circulation back to them after the goods are exported. According to regulations, different types of goods have different export tax rebate rates, roughly in the range of 6% to 13%, which means export tax rebates can become a profit point for enterprises.
As an international common practice, export tax rebates can effectively reduce the overall tax burden on exported goods to zero, avoiding international double taxation. Export tax rebates help enhance the competitiveness of domestic goods in the international market and are adopted by countries around the world. Current data shows that the total export tax rebate (exemption) amount in Yiwu reached 12.071 billion yuan for the entire year of 2023, an increase of 14.78% year-on-year, of which the export tax rebate was 10.625 billion yuan, an increase of 7.39% year-on-year, and the export tax rebate has surpassed 10 billion yuan for the first time.
Chen Jun further pointed out, 'Merchants have a relatively large demand for funds. The bank statements and other data retained through traditional payment methods can serve as a basis for bank loan audits, assisting merchants in obtaining loans from banks to maintain normal operations and production. At the same time, data such as export orders and bank transaction records can also serve as the basis for applying for booths at large exhibitions. Generally, the larger the export scale, the larger the booth allocated.'
Large exhibitions similar to the Canton Fair are important channels for foreign trade enterprises to acquire customers and sign contracts. Taking the data from the 137th Canton Fair in 2025 as an example, as of May 4 (the same below), nearly 290,000 overseas buyers from 219 countries and regions attended, an increase of 17.3% compared to the 135th Canton Fair (the same below); on-site intended export transactions amounted to 25.44 billion USD, an increase of 3%.
In addition, although using stablecoins for payments currently incurs almost zero fees, there are still some practical issues to consider. One aspect is the cost issue, including the costs associated with exchanging stablecoins for fiat currency and the inevitable currency exchange costs. On the other hand, there are risk issues, which may involve money laundering risks and account freezes, significantly impacting the normal operation of foreign trade enterprises.
Yiwu International Trade City Photo / 21st Century Business Herald
It is worth noting that regarding whether to apply for a Hong Kong stablecoin license, Yiwu Small Commodity City is closely monitoring Hong Kong's regulatory framework in the stablecoin field and may submit an application through its subsidiary 'Yi Payment' at an opportune time in the future.
On June 18, the Small Commodity City stated on the interactive platform: 'We welcome and support Hong Kong's positive progress in the stablecoin regulatory framework. The company's cross-border payment platform 'Yi Payment' will continue to pay attention to the relevant regulatory process and will actively assess and submit related applications as soon as regulations are clarified and pathways are smooth.'
