Key Takeaways:
Wang Yongli urges accelerated e-CNY development and suggests launching an offshore yuan stablecoin in Hong Kong. Regulatory developments in the U.S. and Hong Kong are seen as reinforcing U.S. dollar influence in digital payments. His proposal includes integrating digital identity systems with digital currency to enhance competitiveness.The growing scale of U.S. dollar-backed stablecoins presents a strategic challenge for China’s monetary system, according to a blog post published by economist Wang Yongli on June 3.
Wang, a former deputy governor at Bank of China, warned that unchecked expansion of USD stablecoins risks undermining China’s efforts to promote the renminbi in global payments.
USD Stablecoin Growth Puts Pressure on e-CNY Strategy
Wang pointed to the rapid growth of fiat-pegged digital tokens like USDT and USDC, which processed more than $27 trillion in settlements last year and now represent over 99% of the fiat-backed stablecoin market.
He argued that these developments, along with newly passed regulatory frameworks in the U.S. and Hong Kong, indicate a shift in global finance that China’s mainland must respond to with urgency.
“If the digital yuan cannot match or exceed the efficiency and cost advantages of USD stablecoins, the internationalization of the renminbi will face serious obstacles,” Wang wrote.
He called for an accelerated rollout of the e-CNY beyond domestic retail trials, suggesting that China consider launching an offshore yuan stablecoin in Hong Kong. The move, he said, could serve as a transitional model to support CNY-based digital payments in global markets.
Wang also cautioned that the global regulatory embrace of stablecoins, particularly those linked to the U.S. dollar, effectively reinforces U.S. monetary dominance.
Multi-CBDC Networks Viewed as Potential Strategic Outlet
With the Hong Kong dollar itself pegged to the greenback, he noted that the city’s new regulatory regime further strengthens dollar-based settlement networks across Asia.
While current policies in mainland China restrict crypto trading and the use of privately issued tokens, Wang said selective engagement, particularly in enterprise applications and payment infrastructure, may be necessary to maintain relevance in the evolving digital finance environment.
“Stablecoins have become a high-stakes arena for both geopolitical and economic influence,” he wrote, adding that integration of digital identity infrastructure with digital currency could give China a long-term advantage if effectively implemented.
Wang previously held board positions at SWIFT China and served in senior roles across multiple financial and technology firms. His comments reflect growing concern among Chinese financial experts about the pace and direction of global digital asset development.
Wang’s comments raise the question of whether e-CNY could eventually participate in multi-CBDC platforms that support direct settlement across borders. Such integration, if pursued, would not only counterbalance dollar-denominated stablecoins but also offer China an alternative path to scaling yuan-based transactions.
Frequently Asked Questions (FAQ)
Widespread use of USD stablecoins may reduce the effectiveness of local monetary policies, especially in emerging markets, by increasing dependence on dollar liquidity outside traditional banking systems.
A digital yuan stablecoin could enhance RMB liquidity in international markets where direct use of the e-CNY is limited, especially in trade, remittances, or DeFi protocols that require blockchain-native assets.
Regulatory clarity, custody of reserves, exchange controls, and cross-border compliance frameworks would all need to be addressed to ensure alignment with mainland monetary policy while serving global markets.
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