Stablecoins Could Outperform e-CNY in Cross-Border Use, Economist Tells Asia Morning Briefing

China is intensifying its focus on stablecoins, aiming to counter U.S. dollar dominance. Experts note that while the move opens offshore opportunities, capital controls limit the project to Hong Kong’s CNH market, where liquidity is thin.

Dr. Vera Yuen of Hong Kong University’s Business School told CoinDesk that Beijing’s approach is strategic rather than experimental. “CBDCs are typically domestic tools. For cross-border transactions, stablecoins offer superior interoperability and international use,” she said.

The shift comes as the U.S. GENIUS Act sets a regulatory framework for dollar-pegged stablecoins, pressuring China to accelerate its own plans. Evan Auyang, president of Animoca Group, said the law is prompting Beijing to treat stablecoins not as speculative instruments, but as essential infrastructure for global trade and settlement.

China initially prioritized the e-CNY for control, traceability, and seigniorage benefits. Yet stablecoins offer advantages for international use. Capital controls ensure yuan tokens remain offshore, with Hong Kong as the pilot zone. Limited CNH liquidity, however, constrains their reach.

Elsewhere in Asia, Japan is preparing yen-backed stablecoins for domestic circulation, with firms like Monex, SBI, and JPYC leading initiatives—highlighting a regional push to compete with U.S. dollar tokens.

Beijing’s stablecoin effort appears to complement the e-CNY, extending the yuan abroad without compromising domestic control.

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