According to multiple foreign media reports, in recent months, relevant Chinese departments have quietly convened field experts to delve into the issuance of stablecoins pegged to RMB. This move seems contradictory to the strict regulatory policies on virtual asset trading within the country, but it actually contains a well-considered national strategy: to prevent the potential risks that uncontrolled digital assets pose to the financial system while seizing the opportunities presented by blockchain technology to create a 'digital ark' for the internationalization of RMB. So, why is China testing stablecoins at this time? Who will ultimately construct its technological foundation? A competition for blockchain infrastructure led by the 'national team' has quietly begun.
Reasons for testing stablecoins
China's exploration of stablecoins stems from a profound insight into the changes in the global financial landscape and long-term considerations.
Facing the challenges of the dollar system: Currently, the global stablecoin market is dominated by dollar-pegged stablecoins such as Tether (USDT) and Circle (USDC), which consolidates and extends the influence of the dollar in the digital economy. Moreover, traditional cross-border payment systems like SWIFT may be used as tools of restriction in specific geopolitical contexts. Therefore, exploring the issuance of RMB-backed stablecoins aims to establish an independent and efficient cross-border payment network, especially to enhance the convenience and attractiveness of RMB in global trade, particularly in supporting trade settlement among countries along the Belt and Road initiative.
'Chinese characteristic' exploration path: The technical attributes of stablecoins and China's demand for 'prudent management' of the financial system have an inherent tension. Regulatory bodies such as the People's Bank of China are highly cautious about the potential impacts that stablecoins may have on cross-border capital flow management. The 'decentralization' characteristic of blockchain makes it difficult for a single entity to fully control capital flows, and therefore, projects for stablecoins approved in China must align with 'specific national conditions,' which means they are not merely replicating global public chain models like Ethereum, but are more inclined towards developing public infrastructure that is guided by the state and involves multiple participants while being 'independently controllable.'
Hong Kong as a 'testing ground': Hong Kong is actively launching a stablecoin regulatory framework, attracting many institutions to apply for issuance licenses, and the Hong Kong Monetary Authority (HKMA) does not rule out approving stablecoins pegged to RMB. This makes Hong Kong an ideal 'regulatory sandbox' and 'testing ground,' where China can test the issuance of stablecoins pegged to offshore RMB (CNH) in an environment that aligns with international standards and is risk-controlled, accumulating experience without impacting financial stability in the mainland.
'National-level' public chain competition
The issuance of stablecoins is inseparable from a secure and efficient underlying blockchain network. Since blockchain was elevated to a national strategic level in 2016, a landscape of blockchain infrastructure led by the 'national team' has gradually taken shape, with the following four platforms having the most potential to become the technical foundation for Chinese stablecoins:
Blockchain Service Network (BSN): Initiated by the National Information Center, China Mobile, China UnionPay, etc., it is a global public infrastructure for blockchain that can uniformly adapt and manage dozens of mainstream blockchain underlying frameworks worldwide, akin to a universal 'operating system' for the blockchain world. However, its promotion of a 'non-token public chain' concept may limit its ability to support stablecoins in the form of native tokens.
'Xinghuo · Chain Network': Led by the China Academy of Information and Communications Technology, it is a national-level blockchain new integrated infrastructure, focusing on industrial internet application scenarios such as product traceability and supply chain collaboration. It is a permissioned public blockchain network with no token design. Its industrial positioning makes it more suitable for specific-purpose applications rather than general payment stablecoins.
Chain Maker: The ecological alliance is guided by the Beijing municipal government and includes key state-owned enterprises and internet giants, having been mentioned multiple times in the work reports and development plans of the Beijing government. Technically, its transaction throughput capacity (TPS) reaches 100,000, and its R&D institution, Microchip Institute, has signed a strategic cooperation agreement with the central bank’s research institute to jointly promote enterprise-level applications of digital RMB based on 'Chain Maker,' demonstrating significant advantages in stablecoin applications between institutions or in specific scenarios.
Conflux: Currently the only public chain in China operating within a regulatory framework and possessing a native token (CFX), with Turing Award winner Yao Qizhi as the chief scientist and core team members coming from Tsinghua University's 'Yao Class,' showcasing strong technical capabilities. It is collaborating with fintech company AnchorX to explore the issuance of a stablecoin pegged to offshore RMB (AxCNH) to support cross-border payment needs, securing a first-mover advantage in the international stablecoin space.
Parallel development paths
Domestically, there are also several alliance chains initiated by state-owned enterprises or tech giants, such as State Grid Chain and Unicom Chain, each having unique advantages in their respective fields. However, China currently lacks a public chain with international influence, primarily because most blockchain networks are alliance chains, differing significantly in consensus mechanisms and economic models from overseas public chains.
Overall, China's path for stablecoins is more likely to be parallel and distinct, with each playing its role:
Internationally oriented, Conflux, with its internationally accepted public chain attributes, existing token ecosystem, and clear offshore RMB stablecoin exploration plan, could become the vanguard for Chinese stablecoins 'going global' and participating in global competition.
Based domestically, Chain Maker, relying on a strong ecosystem of state-owned enterprises and tech giants, as well as deep cooperation with the digital RMB system, is very likely to become the technical foundation for RMB stablecoins in domestic enterprise applications, B2B payment settlements, and other scenarios.
The competition surrounding the technological foundation of stablecoins is essentially about creating a digital financial infrastructure that meets national strategic needs, serves the real economy, and is independently controllable; this competition has just begun and is worth continuous attention from the global market.