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Stablecoin Wars Go Global: China Enters the Arena

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The world’s most powerful weapon isn’t a missile, a warship, or some classified quantum computer buried in a government lab.

©

It’s a balance sheet.

Or more precisely—a digitized ledger backed by trust, created at will, and disguised as national currency.

For nearly a century, that ledger has been the U.S. dollar.
Its dominance isn’t about beauty, ethics, or even efficiency—it’s about faith. Faith that tomorrow it will still be there. And no one wants to be the first to stop believing.

But cracks are starting to show.

Washington’s response? The GENIUS Act—a framework that doesn’t just regulate stablecoins, it turns them into a strategic instrument of monetary dominance. The idea is simple: ensure that even in blockchain-based finance, the dollar remains the world’s default setting.

Of course, in global economics, every move sparks a countermove.

And China is quietly preparing one.

The Hong Kong Opening Move
Earlier this year, two of China’s tech heavyweights—Ant Group (the Alibaba affiliate) and JD.com—entered talks with the People’s Bank of China to greenlight a new type of digital currency: a CNH stablecoin.

CNH refers to the offshore-traded Chinese yuan—more flexible than its mainland counterpart (CNY), but still under Beijing’s watchful eye.

Why is this significant?

Until now, China has taken a strict stance on crypto: banning Bitcoin, shutting down exchanges, and rolling out a state-controlled digital yuan (e-CNY) limited to tightly monitored trials.

But Hong Kong’s Stablecoin Ordinance, passed on May 21 and effective August 1, changes the equation. It lays out a clear regulatory path for issuing fiat-backed stablecoins in one of the world’s top financial hubs.

Over 40 firms are expected to apply for licenses—but approvals will be scarce. Applicants will need deep capital reserves, local offices, audited backing, and strict compliance. No quick token launches, no unregulated experiments.

The reward? A government-approved CNH stablecoin that can be used for cross-border trade, retail payments, B2B settlements, and as a geopolitical lever.

The Strategic Why
The timing is no coincidence.

The GENIUS Act effectively locks in U.S. dominance in the open stablecoin ecosystem. America isn’t trying to suppress crypto—it’s harnessing it. With 99% of stablecoin transactions already USD-denominated (Tether alone processed over $20 trillion last year), the U.S. dollar has achieved an unparalleled digital footprint.

China is now countering with a two-track strategy:

e-CNY: The central bank–controlled digital yuan dominates domestic transactions.

Transparency Is Not a Trick  But Crypto’s Most Precious Property

Source: create.vista.com

CNH stablecoin: Privately issued but state-approved, it serves as a tool for international trade and influence.

This approach could prove particularly appealing to Belt and Road Initiative (BRI) nations burdened by their reliance on the dollar. Even when trading with China, these countries often route payments through U.S.-aligned systems like SWIFT, facing extra costs, delays, and political exposure.

A CNH stablecoin sidesteps that problem, allowing merchants, exporters, and logistics firms to settle directly in yuan—no mainland bank account required.

More Than Just Crypto
This isn’t a niche blockchain experiment—it’s currency warfare on a new technological battlefield.

Just as U.S.-backed stablecoins have extended the dollar’s reach across the internet, CNH stablecoins could serve as the digital infrastructure for China’s global economic network.

If successful, Beijing won’t just be competing in trade routes and infrastructure—it will be competing for the very denomination of global commerce.

And that’s a fight that could reshape the world’s monetary order.

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