China Eyes Stablecoins to Boost Renminbi Globalization

An article in the Securities Times highlighted the global surge in stablecoins, emphasizing the urgent need for countries to address this phenomenon. Unregulated development of stablecoins could pose risks to domestic financial systems, while ignoring their potential as efficient settlement tools could miss opportunities for currency globalization. For China, which is actively promoting the internationalization of the renminbi, proactive regulation of stablecoins and leveraging them to accelerate the renminbi's global reach may be a strategic move.

Experts and industry insiders agree that stablecoins, as an emerging payment tool, offer unique advantages and potential risks that cannot be overlooked. They advocate for the development of a renminbi stablecoin "sooner rather than later." The "dual-track advancement" of the digital renminbi and offshore renminbi stablecoins could provide a new pathway for the renminbi's internationalization. Fiat-backed stablecoins and the digital renminbi have distinct focuses and complementary roles. The former is primarily used for cross-border settlements and cryptocurrency transactions, while the latter is already widely used in domestic scenarios such as utility bill payments and shopping.

This parallel development of digital renminbi and offshore renminbi stablecoins could pave the way for the renminbi's internationalization. By regulating stablecoins and integrating them into the global financial system, China aims to enhance the renminbi's role in international trade and finance. This strategy not only addresses the risks associated with unregulated stablecoins but also capitalizes on their potential to facilitate cross-border transactions and cryptocurrency exchanges, thereby strengthening the renminbi's position in the global monetary system.