China is shifting its digital currency strategy. After years of pushing the digital yuan, Beijing is now turning to yuan-pegged stablecoins to boost cross-border payments—especially in Belt and Road Initiative (BRI) countries.
In mid-July, Sina Finance reported that Conflux Network, a Shanghai-backed layer 1 blockchain, partnered with fintech firm AnchorX and Eastcompeace Technology to launch stablecoins tied to the offshore yuan (CNH). These tokens target cross-border trade in nations like Malaysia, Indonesia, and Kazakhstan.
Conflux chief technology officer Dr. Guang Yang said the project prioritizes security and auditing to meet adoption needs. “We’re piloting cross-border payments with stablecoins across Belt and Road countries,” Yang told The Defiant. The effort aligns with China’s national research program.
AnchorX product lead Jozey Zhou explained that their stablecoin, AxCNH, focuses on stability and transparency. It doesn’t offer yields. Independent auditors are reviewing the token, and the team plans to release those findings soon.
Digital Yuan Has Fallen Behind Dollar
Beijing’s turn to stablecoins signals a larger change. Despite years of large-scale pilot programs and strong state backing, the digital yuan has struggled to gain international traction. Yuan-pegged stablecoins, especially offshore ones, now offer a more practical path to expand the currency’s global reach.
Meanwhile, US lawmakers are pushing stablecoin adoption in another direction. In July, the House of Representatives passed the GENIUS Act, which outlines federal rules for dollar-pegged stablecoins. That move gives U.S.-based projects a clearer legal path to scale globally.
Chinese officials appear to be paying attention. In recent weeks, state-linked media have called for stronger support for yuan-based stablecoins. A Securities Times article, published under the Chinese Communist Party’s media group, urged authorities to act before missing a “golden opportunity” to increase the yuan’s influence abroad.
Regulatory Challenges Remain
Developing stablecoins in China isn’t easy. The government still bans crypto trading and mining. However, Hong Kong plans to introduce a stablecoin licensing framework starting Aug. 1, potentially providing a more open environment for experimentation.
Some past efforts ended badly. In 2023, police in Shanghai detained the CNHC Group team, which had launched CNH- and HKD-pegged stablecoins. Authorities shut down the company’s office. Officials haven’t filed charges or offered updates since.
Despite these challenges, China appears to be rebalancing its digital currency goals. While Beijing continues to push the digital yuan, offshore yuan stablecoins could offer a faster, more flexible route to expand its role in global finance.
