China’s e-commerce heavyweight JD.com and Ant Group, the fintech arm of Alibaba, are lobbying the People’s Bank of China (PBOC) to greenlight Chinese yuan-based stablecoins to counter the global rise of US dollar-pegged tokens.
The two firms urged regulators to allow stablecoins backed by offshore yuan (Chinese yuan that circulates outside mainland China) to launch in Hong Kong, arguing it would strengthen the yuan’s role in global trade while limiting the dollar’s influence, Reuters reported Thursday, citing sources familiar with the matter.
Per the report, during recent private meetings with the PBOC, JD.com executives argued that yuan stablecoins are urgently needed to promote the currency’s international use.
JD.com and Ant are reportedly preparing to apply for stablecoin licenses in Hong Kong and Singapore. JD.com has also allegedly proposed starting yuan stablecoin issuance in Hong Kong before expanding pilots to China’s free trade zones, with early feedback from regulators described as positive.
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Inefficient yuan payments risk dollar dominance
In May, the yuan’s share of global payments slipped to 2.89%, its lowest in nearly two years. The dollar holds a commanding 48% share, Reuters reported, citing data from payment platform Swift.
Industry veteran Wang Yongli, former deputy head of Bank of China, warned last month that if yuan cross-border payments remain less efficient than dollar stablecoins, it poses a strategic risk for China, per the report.
The discussions come as Hong Kong races to establish rules for stablecoins. Last week, the region announced its new digital asset plan, which centers on regulating stablecoins and promoting asset tokenization through its “LEAP” framework, aiming for legal clarity, ecosystem growth, real-world adoption and talent development.
As part of the new framework, the government will implement a licensing regime for stablecoin issuers starting Aug. 1, which “will facilitate the development of real-world use cases.”
Related: South Korea pauses CBDC tests as stablecoin fever hits banks
JD.com to apply for stablecoin licenses
In June, JD.com founder Liu Qiangdong said the e-commerce giant plans “to apply for our stablecoin license in all major sovereign currency countries in the world.”
The statement came after PBOC Governor Pan Gongsheng announced plans to establish an international digital yuan operations center in Shanghai to internationalize the digital yuan and reduce global reliance on the US dollar.
At the time, Gongsheng said China envisions a “multipolar” currency system where multiple currencies support the global economy. This vision contrasts with the current system, where a few currencies, like the US dollar and the euro, play large roles in the global financial system.
The stablecoin market cap currently sits at over $258 billion, according to data from CoinMarketCap. All of the top 10 stablecoins by market cap are dollar-denominated. EURC (EURC), pegged to the euro, is the largest non-dollar stablecoin, ranking 11th in terms of market cap.
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