China wakes up with the Stablecoin! The United States recently doubled with the development of crypto and announced the intention to build a national strategic Bitcoin reserve. With Stablecoins supported by the American dollar that spread rapidly, thanks to Trump’s pro-Crypto attitude, Europe has already raised red flags over monetary control. Now China weighs its options.
A recent article By Zhang Ming, a top economist from the Chinese National Finance and Development Laboratory, emphasizes the risks of these digital assets that strengthen the dominance of the US dollar.
The rising influence of dollar stablecoins
Stablecoins linked to the US dollar have become dominant in crypto -trade and decentralized finances (Defi). Many people in countries with weaker currencies use them as a store of value. Zhang warns that this digital assets can further solidify the global financial power of the US dollar, because they connect the real credit of the dollar with the virtual economy.
Expanding the CBDC scope from China
One of the most important suggestions of Zhang is expanding the use of China’s Central Bank Digital Currency (CBDC), the digital yuan. Currently it mainly serves as a digital alternative to cash (M0) for retail transactions. However, Zhang suggests that it must also cover bank deposits (M1 and M2) and business transactions.
Although China has already made a number of business-to-business (B2B) CBDC payments, Zhang believes that the digital yuan must continue to prevent the rise of dollar-supported stablecoins. He mentioned Mbridge, the existing cross-border CBDC project of China, not that has international ambitions, but is also confronted with concern about his involvement in sanctioned countries such as Russia.
China’s Stablecoin -Potential
Another option is that China develops its own stablecoins. Zhang regards this as an unexplored area, but China has already started experimenting – especially by Hong Kong. The region has approved various crypto fairs, launched a stablecoin -controlling sandbox and recently saw Standard Chartered Form a stablecoin venture with Animoca brands and Hong Kong Telecom.
To strengthen the international role of the Chinese Yuan, Zhang proposes to use large Chinese platforms such as Ant Group’s Alipay and Ant International. These companies are already strongly present in Asia and beyond. By integrating digital tokens into their worldwide payment networks, China could increase the influence of the Yuan and compensate the dominance of US dollar stablecoins.
US-China Tech War and the Future
The rivalry between China and the US is not only about trade, but also about technology. While the US supports innovation in the crypto-space, China focuses on government-driven digital financing. This difference in approach could be the future of global finances. If China’s strategy succeeds, this can change how international transactions are carried out. However, the widespread acceptance of the digital yuan will take time and it is still to be seen whether it can really challenge the US dollar.
China’s crypto strategy is a clear sign of his ambitions to reform global financing. Whether it succeeds or not, it is already influenced how countries view digital currencies and financial independence.
