Alibaba and JPMorgan Bypass Stablecoin Crackdown with Deposit-Token Trade System

Alibaba Group Holding Ltd. and JPMorgan Chase & Co. are set to launch a tokenized B2B payment system by December 2025, leveraging blockchain technology and deposit tokens to streamline global trade while navigating China's stringent digital currency regulations. The platform, dubbed "Agentic Pay," will enable near-instant cross-border settlements using tokenized U.S. dollars and euros, bypassing traditional banking intermediaries and reducing transaction costs. The collaboration builds on JPMorgan's Kinexys blockchain infrastructure, which already processes $2 billion in tokenized transactions daily.

The system employs "deposit tokens" backed by fiat deposits held in regulated banks, distinguishing it from privately issued stablecoins that have drawn regulatory scrutiny in China. These tokens, akin to JPMorgan's JPMD, allow institutional users to transfer funds 24/7 with minimal latency, offering yield-bearing features that could attract large institutional investors. Alibaba's move aligns with Beijing's preference for state-linked digital finance, avoiding the political risks associated with stablecoins. The People's Bank of China has intensified its crackdown on private digital currencies, prompting Alibaba to pivot from earlier attempts to develop yuan-backed stablecoins according to reports.

Agentic Pay will integrate artificial intelligence to automate contract generation between buyers and sellers, transforming chat histories into binding agreements. This AI-driven approach is part of Alibaba's broader strategy to enhance its B2B ecosystem, which saw a 50% year-on-year growth in active global suppliers. The company also plans to introduce an "AI Mode" search tool, enabling businesses to compare suppliers by price, logistics, and production capacity according to analysis. Subscribers will pay $20 monthly or $99 annually for these services, signaling a shift toward recurring revenue streams according to estimates.

The initiative reflects a broader industry trend toward tokenized payments. FXC Intelligence-SUNRATE's recent white paper highlighted how AI, stablecoins, and blockchain are reshaping B2B transactions, projecting the cross-border payments market to reach $47.8 trillion by 2032. Meanwhile, Binance and other exchanges are expanding support for tokenized Treasurys, underscoring growing institutional demand for yield-bearing digital assets according to reports.

Alibaba's timing is strategic. With Chinese regulators tightening control over stablecoins, the company's deposit-token model offers a compliant alternative for global trade. Kuo Zhang, president of Alibaba.com, emphasized the urgency of modernizing trade systems, calling the project a "paradigm shift" in e-commerce. Analysts estimate the platform could process billions annually, potentially forcing competitors to adopt similar technologies as tokenization gains traction according to forecasts.