The Yuan vs dollar battle is heating up more than ever, as China’s corporate heavyweights JD.com and Ant Group are making a bold move to weaken the US dollar’s dominance in global trade.
The firms are reportedly urging Chinese regulators to approve offshore yuan-backed stablecoins, aiming to create a digital alternative to dollar-pegged tokens that dominate cross-border payments.
This push in the yuan vs dollar battle comes as China seeks to expand its currency’s role in international finance while reducing reliance on the US financial system.
Why yuan stablecoins could shift global finance
Stablecoins, cryptocurrencies pegged to stable assets like fiat currencies, have become crucial for fast, low-cost international transactions. Currently, nearly all major stablecoins are tied to the US dollar, reinforcing its global supremacy.
According to Reuters, JD.com and Ant Group argue that yuan-backed stablecoins, particularly those using offshore yuan (CNH), could:
Boost the yuan’s share in global payments (currently just 2.89%, per Swift data)
Provide a faster alternative to traditional yuan settlements
Reduce dependency on dollar-based financial infrastructure
“Without competitive digital yuan solutions, China risks falling further behind in the yuan vs dollar race,” warned Wang Yongli, former deputy head of Bank of China.
Top stablecoins by market cap. Source: CoinMarketCap
Hong Kong as a testing ground for yuan digital currency
The companies are eyeing Hong Kong as a launchpad for their stablecoin ambitions. The region recently introduced a licensing regime for stablecoin issuers, set to take effect in August. JD.com has already proposed starting with pilot programs in Hong Kong before expanding to China’s free trade zones.
As the Yuan vs dollar battle becomes fiercer, egulators have reportedly responded positively, seeing this as a way to:
Strengthen Hong Kong’s fintech leadership
Expand yuan usage in global trade
Counter the dollar’s 48% share in international payments
A strategic move in the broader yuan vs dollar battle
China’s central bank, the PBOC, has long sought to internationalize the yuan even before the famous Yuan vs dollar battle. Governor Pan Gongsheng recently announced plans for a Shanghai-based digital yuan operations center to accelerate this effort.
JD.com founder Liu Qiangdong confirmed the company’s aggressive stance, stating, “We plan to apply for stablecoin licenses in all major currency jurisdictions.” This aligns with China’s vision of a “multipolar” currency system, where no single currency—like the dollar—holds overwhelming power.
The uphill battle against dollar dominance
Despite China’s efforts, the dollar’s dominance remains formidable. The entire stablecoin market is worth over $258 billion, and the top 10 stablecoins are all dollar-pegged. Even the euro-backed EURC lags far behind.
For yuan stablecoins to succeed, they must:
Offer faster, cheaper transactions than existing dollar stablecoins
Gain trust among international traders
Navigate geopolitical tensions that could limit adoption
Who wins the yuan vs dollar showdown?
The coming months will be critical. If Hong Kong approves these yuan stablecoin proposals, it could mark a turning point in digital currency competition. However, widespread adoption will depend on whether businesses outside China see enough value in switching from dollar-based systems.
Sunderland-born crypto enthusiast, cycling fanatic, and wordsmith. As co-founder and lead editor of The Bit Gazette, Mark combines his passion for blockchain with a knack for breaking down complex stories into engaging content. When he's not tracking the latest crypto trends, you'll find him on two wheels—exploring backroads or clocking miles on his favorite cycling routes. Dedicated to delivering sharp, insightful journalism in the fast-moving world of digital assets.
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