China is preparing to greenlight its first stablecoins via Hong Kong, signaling a strategic shift in its crypto approach and a renewed effort to elevate the renminbi on the global stage.
According to the Financial Times, the plan is part of a broader ambition to reduce reliance on the U.S. dollar and expand China’s financial footprint through digital assets.
Hong Kong’s new regulatory framework allows licensed firms to issue stablecoins backed by fiat currencies, opening the door for a tightly controlled entry into the crypto space. While mainland China maintains restrictions on private crypto activity, this measured approach provides a sandbox for digital innovation under Beijing’s watch.
Experts say stablecoins are emerging as credible rivals to traditional currencies. Chen Lin, director at the University of Hong Kong’s Centre for Financial Innovation, noted the rising interest from Chinese institutions in using stablecoins to compete globally.
The People’s Bank of China has already acknowledged the transformative potential of stablecoins. In June, central bank governor Pan Gongsheng stated that these assets are reshaping the payments landscape. Regulators have since been actively discussing frameworks tailored to China’s specific needs, though officials stress that any domestic implementation will prioritize national control and security.
Taxi drivers in Hong Kong are already accepting digital payments, a sign of growing acceptance at the retail level. Still, early-stage stablecoin programs will likely focus on business-to-business transactions to ensure financial stability at launch, according to Paul Tang of the Hong Kong Money Service Operators Association.
Several state-owned enterprises are reportedly preparing to apply for licences, though only one of China’s top four banks is expected to receive approval in the first round. Despite the momentum, experts caution that building a viable alternative to U.S. dollar-backed stablecoins will be a long-term challenge.
Source: https://coindoo.com/china-prepares-to-launch-first-stablecoins-in-bid-to-challenge-the-dollar/