China Developing Native Stablecoin Alternative to Reduce Dollar Dominance

China Developing Native Stablecoin Alternative to Reduce Dollar Dominance

Chinese authorities are actively exploring the creation of a domestic alternative to leading stablecoins like USDT and USDC, which are seen as reinforcing the global dominance of the U.S. dollar, according to sources cited by the Financial Times.

In an effort to integrate blockchain innovation without compromising control over the national financial system, the People’s Bank of China (PBoC) has reportedly held multiple closed-door discussions with policy experts in recent months, focusing on a framework for stablecoin regulation.

Interest in stablecoins is growing within state-owned enterprises, particularly in Hong Kong, where several government-linked firms are reportedly preparing license applications to issue their own stablecoins.

Sources also indicate that China is aiming to expand the use of the yuan in cross-border payments, an area where stablecoins could serve as an alternative to traditional systems like SWIFT, which Beijing views as a strategic vulnerability amid rising tensions with the United States.

This move aligns with recent statements by Xiao Feng, chairman of HashKey Group, often referred to as the “father of Chinese blockchain,” who has suggested that China and Hong Kong’s crypto regulatory approach may soon undergo major transformation.