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Yahoo
02-07-2025
- Business
- Yahoo
Stablecoin Push Gains Ground in China in New Challenge to US
(Bloomberg) -- China faces growing calls from policy advisers and economists to explore using stablecoins for cross-border payments, as the US moves to entrench the dollar's dominance through the still-emerging technology. Struggling Downtowns Are Looking to Lure New Crowds Sprawl Is Still Not the Answer California Exempts Building Projects From Environmental Law While China hasn't formally embraced stablecoins — digital tokens pegged to traditional currencies — and maintains a sweeping ban on crypto activities, recent remarks from senior central bank officials have given fresh momentum to discussions about their potential role in global payments. People's Bank of China Governor Pan Gongsheng said in June that stablecoins could revolutionize international finance, particularly as rising geopolitical tensions highlight the fragility of traditional payment systems, which he warned can be politicized and used as a sanction tool. At the same Shanghai event, former central bank head Zhou Xiaochuan said dollar-linked stablecoins could facilitate dollarization. Other mainland and Hong Kong financial officials talked about the potential for yuan-based stablecoins to support China's long-running effort to promote its currency on the world stage. Beijing has long been wary of cryptocurrencies, viewing them as a threat to financial stability and capital controls. But economists now see an opening, fueled in part by the Trump administration's growing support for digital tokens. Morgan Stanley suggests China could use Hong Kong to trial offshore yuan-based stablecoins that would avoid violations of Beijing's strict capital rules. 'Stablecoins are not new currencies, but new distribution channels for existing ones,' said Robin Xing, chief China economist at Morgan Stanley. 'It is crucial for China to embrace the trend of sovereign currency tokenization to maintain competitiveness in the digital infrastructure race.' Just hours before Pan and other Chinese officials spoke at the June 18 Lujiazui Forum, the US Senate passed a bill regulating stablecoins, in a major win for the crypto industry and a boost for President Donald Trump's digital asset agenda. Treasury Secretary Scott Bessent said in a June 19 X post that stablecoins could strengthen — not threaten — the dollar's dominance. Bessent told Bloomberg TV on Monday that global users are likely to favor US-backed stablecoins over central bank digital currencies from Europe or China, citing greater trust in the private sector under American regulation than the risk of government control elsewhere. Stablecoins, typically backed by traditional currencies and issued by private firms, are gaining traction as a faster, cheaper option for cross-border payments. Most are pegged to the dollar and backed by US assets like short-term Treasuries, with total supply projected to reach $3.7 trillion by 2030. In response, Chinese economists are urging the development of yuan-linked alternatives. 'If China doesn't develop stablecoins, it will essentially withdraw from the competition for next-generation global currency dominance and hand it to others,' said Shen Jianguang, chief economist at founder Richard Liu reportedly told staff the company plans to apply for stablecoin licenses in all major markets to cut cross-border payment costs by 90% and reduce settlement time to under 10 seconds. Hong Kong has recently introduced its own regulatory framework for fiat-referenced stablecoins, offering licenses to issuers operating in the city. and Ant Group are among the first tech giants expected to apply. Shanghai-listed Zhejiang China Commodities City Group Co., operator of the world's largest wholesale goods market, has also said it plans to seek a license. Offshore yuan stablecoins could help China take advantage of mounting global unease with dollar dominance, especially after it was used as a tool of financial pressure on the Kremlin following Russia's invasion of Ukraine. Interest in the yuan is growing, with more than 30% of China's goods trade settled in the currency in February, the highest in a decade, though its share in global payments remains modest. The growing interest in stablecoins comes as China's own state-backed digital currency, the e-CNY, has struggled to gain traction both at home and abroad. A separate cross-border payments initiative, mBridge, is facing an uncertain future after a main participant, the Bank for International Settlements, pulled out over concerns it could be used to bypass sanctions. Pan recently announced plans for an international e-CNY center in Shanghai, signaling continued interest in promoting its use for trade. China should take a 'dual track' approach to bolster the yuan's global use, according to Li Yang, chairman of the state-backed National Institution for Finance and Development and a former PBOC adviser. That would involve continuing traditional efforts, such as expanding currency swaps and the yuan-based CIPS settlement system, while also leveraging Hong Kong's financial institutions to promote offshore yuan-linked stablecoins. What Bloomberg Intelligence Says ... 'Hong Kong's stablecoins can become Beijing's alternative to sidestep SWIFT, alongside the earlier adopted CIPS and mBridge.' They 'could significantly advance the yuan's global usage. The yuan's adoption faces a setback — transactions via CIPS have yet to reach a critical mass.' — Francis Chan, senior banking and fintech analyst. Click here to read the full report. For now, stablecoins are mostly used for crypto trading instead of business payments, and regulators still need to address risks like fraud and financial crime. While many countries are exploring regulations, key questions remain, like whether stablecoins should be treated as currencies or financial assets. Ultimately, the global status of a currency is determined by the nation's overall power and credibility, not a new means of payment, according to Liu Xiaochun, vice president of Shanghai Finance Institute. Chinese stablecoins may face limits without broader economic reforms, according to Eswar Prasad, a Cornell University professor and author of the book The Future of Money: How the Digital Revolution Is Transforming Currencies and Finance. 'Yuan-linked stablecoins issued in Hong Kong are unlikely to gain much traction in the absence of unification of onshore and offshore exchange markets,' he said. But stablecoins, he added, could nudge Beijing toward change. By complicating exchange rate and monetary policy management, they might 'serve as an incentive to undertake liberalization and market-oriented reforms,' he said. (Updates with additional comment in fourth to last paragraph.) SNAP Cuts in Big Tax Bill Will Hit a Lot of Trump Voters Too How to Steal a House America's Top Consumer-Sentiment Economist Is Worried China's Homegrown Jewelry Superstar Pistachios Are Everywhere Right Now, Not Just in Dubai Chocolate ©2025 Bloomberg L.P. 擷取數據時發生錯誤 登入存取你的投資組合 擷取數據時發生錯誤 擷取數據時發生錯誤 擷取數據時發生錯誤 擷取數據時發生錯誤
Business Times
02-07-2025
- Business
- Business Times
China urged to embrace stablecoins as US moves to cement lead
China faces growing calls from policy advisers and economists to explore using stablecoins for cross-border payments, as the US moves to entrench the US dollar's dominance through crypto technology. While China has not formally embraced stablecoins – digital tokens pegged to traditional currencies – and maintains a sweeping ban on crypto activities, recent remarks from senior central bank officials have given fresh momentum to discussions about their potential role in global payments. The People's Bank of China (PBOC) governor Pan Gongsheng said in June that stablecoins could revolutionise international finance, particularly as rising geopolitical tensions highlight the fragility of traditional payment systems, which he warned can be politicised and used as a sanction tool. At the same Shanghai event, former central bank governor Zhou Xiaochuan said US dollar-linked stablecoins could facilitate dollarisation. Other mainland and Hong Kong financial officials talked about the potential for yuan-based stablecoins to support China's long-running effort to promote its currency on the world stage. Beijing has long been wary of cryptocurrencies, viewing it as a threat to financial stability and capital controls. But economists now see an opening, fuelled in part by the Trump administration's growing support for digital tokens. Morgan Stanley suggests China could use Hong Kong to trial offshore yuan-based stablecoins that would avoid violations of Beijing's strict capital rules. 'Stablecoins are not new currencies, but new distribution channels for existing ones,' said Robin Xing, chief China economist at Morgan Stanley. 'It is crucial for China to embrace the trend of sovereign currency tokenisation to maintain competitiveness in the digital infrastructure race.' BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up Just hours before Pan and other Chinese officials spoke at the Jun 18 Lujiazui Forum, the US Senate passed a bill regulating stablecoins, in a major win for the crypto industry and a boost for US President Donald Trump's digital asset agenda. Treasury Secretary Scott Bessent said in a Jun 19 X post that stablecoins could strengthen, not threaten, the US dollar's dominance. He told Bloomberg TV on Monday (Jun 30) that global users are likely to favour US-backed stablecoins over central bank digital currencies from Europe or China, citing greater trust in the private sector under US regulation than the risk of government control elsewhere. Stablecoins, typically backed by traditional currencies and issued by private firms, are gaining traction as a faster, cheaper option for cross-border payments. Most are pegged to the US dollar and backed by US assets such as short-term Treasuries, with total supply projected to reach US$3.7 trillion by 2030. In response, Chinese economists are urging the development of yuan-linked alternatives. chief economist Shen Jianguang warned that without such efforts, China risks falling behind in the race for next-generation currency leadership. Founder Richard Liu reportedly told staff the company plans to apply for stablecoin licenses in all major markets to cut cross-border payment costs by 90 per cent and reduce settlement time to under 10 seconds. Hong Kong has recently introduced its own regulatory framework for fiat-referenced stablecoins, offering licenses to issuers operating in the city. and Ant Group are among the first tech giants expected to apply. Shanghai-listed Zhejiang China Commodities City Group, operator of the world's largest wholesale goods market, has also said it plans to seek a license. Offshore yuan stablecoins could help China take advantage of mounting global unease with US dollar dominance, especially after it was used as a tool of financial pressure following Russia's invasion of Ukraine. Interest in the yuan is growing, with more than 30 per cent of China's goods trade settled in the currency in February, the highest in a decade, though its share in global payments remains modest. The growing interest in stablecoins comes as China's own state-backed digital currency, the e-CNY, has struggled to gain traction both at home and abroad. A separate cross-border payments initiative, mBridge, is facing an uncertain future after a main participant, the Bank for International Settlements, pulled out over concerns it could be used to bypass sanctions. Pan recently announced plans for an international e-CNY centre in Shanghai, signalling continued interest in promoting its use for trade. China should take a 'dual track' approach to bolster the yuan's global use, according to Li Yang, chairman of the state-backed National Institution for Finance and Development and a former PBOC adviser. That would involve continuing traditional efforts, such as expanding currency swaps and the yuan-based Cips settlement system, while also leveraging Hong Kong's financial institutions to promote offshore yuan-linked stablecoins. For now, stablecoins are mostly used for crypto trading instead of business payments, and regulators still need to address risks such as fraud and financial crime. While many countries are exploring regulations, key questions remain, such as whether stablecoins should be treated as currencies or financial assets. Chinese stablecoins may face limits without broader economic reforms, according to Eswar Prasad, a Cornell University professor and author of the book The Future of Money: How the Digital Revolution Is Transforming Currencies and Finance. 'Yuan-linked stablecoins issued in Hong Kong are unlikely to gain much traction in the absence of unification of onshore and offshore exchange markets,' he said. But stablecoins, he added, could nudge Beijing towards change. By complicating exchange rate and monetary policy management, they might 'serve as an incentive to undertake liberalisation and market-oriented reforms', he said. BLOOMBERG
South China Morning Post
19-06-2025
- Business
- South China Morning Post
Why US-backed stablecoins have China wary of a potentially more dominant dollar
With major economies gearing up for the rising ubiquity of stablecoins and their impact on the global economy, former Chinese central bank chief Zhou Xiaochuan has warned that US dollar-backed stablecoins could accelerate the 'dollarisation' of the international monetary system. Amid the explosive growth of cryptocurrency in the past few years, continued focus from high-level figures reflects the Chinese government's interest in underlying technologies and their potential role in cross-border finance, despite cryptocurrency trading being banned on the mainland. 'Although other countries are considering issuing their own local-currency stablecoins, their potential global impact remains uncertain, whereas USD-backed stablecoins could have worldwide influence,' said Zhou, the architect of many of China's early financial reforms, at the Lujiazui Forum in Shanghai on Wednesday. 'USD-backed stablecoins may facilitate US dollarisation, and the effects of this remain highly debated. 'Unless facing extreme, dire circumstances – such as [fighting] high inflation or heavy debt burdens – pursuing dollarisation could bring many adverse side effects.' The US Senate this week passed landmark stablecoin legislation that, for the first time, established federal guardrails for US dollar-pegged stablecoins, creating a regulated pathway for private companies to issue digital dollars with the blessing of the federal government. Zhou Xiaochuan, former governor of the People's Bank of China, attends a plenary session during the 2025 Lujiazui Forum on Wednesday in Shanghai. Unlike volatile cryptocurrencies such as bitcoin or ethereum, whose prices experience drastic fluctuations, stablecoins aim to combine the efficiency of digital assets with the reliability of traditional money. By pegging their value to fiat currencies such as the US dollar or Hong Kong dollar, or to other reserve assets, stablecoin prices are meant to live up to their name – as long as the currency behind them remains strong.
