China’s Strategic Push for Yuan-Backed Stablecoins in Global Trade: Assessing the Investment Potential in Blockchain Infrastructure and Fintech Firms

China’s strategic pivot toward yuan-backed stablecoins marks a pivotal shift in global finance, driven by a combination of regulatory innovation, corporate adoption, and technological advancements. This initiative, aimed at challenging the U.S. dollar’s dominance in cross-border trade, is creating a high-conviction investment opportunity in blockchain infrastructure and fintech firms. By analyzing the interplay of policy, corporate strategy, and technology, we can identify the most compelling opportunities in this emerging ecosystem.

Regulatory Evolution: A Controlled Path to Globalization

China’s recent regulatory developments signal a calculated approach to internationalizing the yuan. The State Council’s roadmap for yuan-backed stablecoins, with Hong Kong and Shanghai as pilot zones, reflects a dual focus on compliance and scalability. Hong Kong’s Stablecoins Ordinance, effective August 1, 2025, mandates 100% reserve backing and real-time monitoring, creating a framework that balances innovation with financial stability [1]. This regulatory clarity is attracting firms like Ant International and JD.com, which are vying for licenses to issue stablecoins in offshore markets [4]. Meanwhile, Shanghai’s integration of these stablecoins with its digital yuan (e-CNY) infrastructure underscores a long-term vision to harmonize digital and traditional monetary systems [6].

The geopolitical stakes are high. With dollar-backed stablecoins dominating 99% of the global market, China’s move is a direct response to U.S. legislation like the GENIUS Act, which accelerates dollar-backed stablecoin adoption [3]. By leveraging its Belt and Road Initiative (BRI) corridors, China aims to redirect trade flows toward yuan-pegged digital assets, particularly in Africa, Southeast Asia, and Central Asia [6].

Corporate Adoption: PetroChina and the Energy Sector

State-owned enterprises are at the forefront of this transition. PetroChina, one of China’s largest energy firms, is conducting feasibility studies to adopt yuan-backed stablecoins for cross-border energy trade settlements [2]. This initiative aligns with Hong Kong’s regulatory framework and aims to reduce reliance on the U.S. dollar in oil and commodity markets [1]. Pilot programs in Shenzhen have already demonstrated that stablecoins can mitigate exchange rate losses compared to traditional SWIFT transfers [2]. For investors, PetroChina’s involvement signals a credible path to large-scale adoption, given its operations in over 50 countries.

Technological Upgrades: Conflux 3.0 and the Infrastructure Revolution

The backbone of this ecosystem is being built by blockchain platforms like Conflux. Its Conflux 3.0 upgrade, launched in August 2025, boasts a throughput of 15,000 transactions per second (TPS) and native support for on-chain AI agent interactions [5]. This technological leap positions Conflux as a critical infrastructure provider for yuan-backed stablecoins, particularly in cross-border settlements. The platform’s partnership with fintech firm AnchorX to develop AxCNH—a stablecoin pegged to the offshore yuan (CNH)—has already secured in-principle approval from Kazakhstan’s Astana Financial Services Authority [4].

Conflux’s collaboration with TokenPocket, a crypto wallet with 25 million users, further amplifies its reach. Pilot projects in Central Asia and Southeast Asia are testing AxCNH’s utility in BRI-related trade, with plans to expand to 10 countries by 2026 [5]. The market has responded positively: CFX’s native token surged 116.6% following the announcement of Conflux 3.0 [5].

Competitive Landscape and Financial Projections

The yuan-backed stablecoin market is projected to grow to $2 trillion by 2028, with China aiming to capture a significant share [3]. However, structural challenges remain, including capital controls and the yuan’s current 2.88% global payment share [6]. Despite these hurdles, the controlled rollout through Hong Kong and Shanghai offers a viable path to adoption.

Key players like Ant International are lobbying for stablecoin licenses in Hong Kong, Singapore, and Luxembourg, while PetroChina’s energy-focused use cases provide a tangible application layer [4]. For investors, the most compelling opportunities lie in blockchain infrastructure providers (e.g., Conflux, AntChain), cross-border fintech platforms, and regtech firms specializing in anti-money laundering (AML) compliance under Hong Kong’s stringent regime [3].

Conclusion: A High-Conviction Investment Thesis

China’s strategic push for yuan-backed stablecoins is not merely a financial experiment but a geopolitical maneuver to reshape global trade. The convergence of regulatory innovation, corporate adoption, and technological upgrades creates a robust foundation for this ecosystem. While risks such as capital controls and regulatory shifts persist, the potential rewards—particularly for firms like Conflux and PetroChina—justify a high-conviction investment approach. As the yuan-backed stablecoin market matures, early adopters in blockchain infrastructure and fintech will likely reap outsized gains.

Source:
[1] China considering yuan-backed stablecoins to boost global currency usage [https://www.reuters.com/business/finance/china-considering-yuan-backed-stablecoins-boost-global-currency-usage-sources-2025-08-21/]
[2] China's PetroChina Explores Stablecoin Use for Energy Cross-Border Payments [https://coincentral.com/china-petrochina-explores-stablecoin-use-for-energy-cross-border-payments/]
[3] China's Strategic Move Toward Yuan-Backed Stablecoins [https://www.ainvest.com/news/china-strategic-move-yuan-backed-stablecoins-challenging-dollar-dominance-reshaping-global-forex-dynamics-2508/]
[4] Conflux announces plan to launch a yuan-backed stablecoin [https://www.mitrade.com/insights/news/live-news/article-3-975701-20250722]
[5] Conflux Launches Offshore Yuan Stablecoin for Belt and Road Initiative [https://www.ainvest.com/news/conflux-launches-offshore-yuan-stablecoin-belt-road-initiative-2507/]
[6] China eyes stablecoins to boost 'yuan internationalization' [https://coingeek.com/china-eyes-stablecoins-to-boost-yuan-internationalization/]