How China positions the yuan against USDT

The U.S. dollar is still king in the world of digital payments, but that could be changing.

The U.S. dollar is still king in the world of digital payments, but that could be changing. Two Chinese giants, JD.com and Ant Group, have set their sights on a digital counterattack: a stablecoin tied to the offshore yuan that would break USDT’s monopoly.

According to sources at Reuters, JD.com and Ant are holding confidential talks with the Chinese central bank (PBOC) to get approval for such stablecoins to be launched in Hong Kong. The digital coin would be pegged to the yuan circulating outside the mainland, the so-called CNH, and would offer an alternative to the dominant digital dollar, USDT.

Starting August 1, Hong Kong will roll out a new licensing system for stablecoin issuers. JD.com and Ant want to be first to react to it, though they find the current options too limited. A stablecoin pegged to the Hong Kong dollar that itself is tied to the U.S. dollar wouldn’t serve the broader goal: putting the yuan on the international map.

Former vice chairman of the Bank of China, Wang Yongli, warned on social media in June: “It would be strategically irresponsible if cross-border yuan payments can’t compete with dollar-stablecoins.”

USDT rules the market — even in China

According to the Bank for International Settlements (BIS), more than 99% of all stablecoins globally are pegged to the U.S. dollar. USDT, issued by Tether, holds the largest share at 68%. Chinese users are using it more too. The Hong Kong broker CryptoHK told Reuters that USDT trading volume from Chinese customers has quintupled since 2021, driven by international transactions.

Why? Capital controls, geopolitical tensions, and volatile currencies in emerging markets make USDT an appealing option for exporters. “China has reached a point where it simply can’t watch from the sidelines any longer,” says Xiao Feng, chairman of crypto exchange HashKey.

JD.com aims global reach

JD.com founder Richard Liu said in June he plans to seek licenses worldwide for stablecoins in all major currencies. The goal: cut international payments by up to 90% and settle transactions in under ten seconds.

The first step would be a yuan stablecoin in Hong Kong. After that, JD.com wants to roll the model out to other regions, such as China’s free-trade zones. Ant Group is meanwhile pursuing licenses in both Hong Kong and Singapore. JD’s subsidiary Coinlink Technology is already active in the HKMA Stablecoin Sandbox — a pilot project by Hong Kong’s financial regulator.

Competition is fierce: more than 40 firms, including Circle and Standard Chartered, are preparing applications. Requirements are stiff: at least HKD 25 million in equity, a physical office in Hong Kong, and strict rules on transparency, risk management, and anti-money-laundering measures.

Yuan under pressure, stablecoin as a digital breakthrough?

China has been trying for years to position the yuan as a global trading currency, but results have been mixed. In May 2025, the yuan accounted for just 2.89% of global payment traffic per SWIFT, the lowest in nearly two years. The U.S. dollar dominates with 48.46%.

An offshore yuan stablecoin could change that. Unlike crypto assets banned by Beijing, this digital version offers a legitimate path to making the yuan attractive abroad without violating domestic rules. PBOC Governor Pan Gongsheng recently called stablecoins “a major regulatory challenge.” His adviser Huang Yiping said a yuan-stablecoin in Hong Kong is “a serious option.”

Big market potential, but mixed optimism

The total market cap of stablecoins is around $258 billion today. Standard Chartered says this could rise to $2 trillion by 2028. JPMorgan is more skeptical: they see limited use outside trading platforms and forecast only about $500 billion in market cap by 2028.

China’s digital shadow game via Hong Kong

What JD.com and Ant Group are proposing is more than a financial tech innovation — it’s a geopolitical chess move. While the U.S., with support from former President Trump, doubles down on USDT and USDC, China is looking for a backdoor seat at the table in the digital currency world. Whether the PBOC will eventually green-light it remains a litmus test for China’s crypto path forward.