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Chinese Tech Giants JD.com and Ant Group Lobby China’s Central Bank for Yuan-Backed Stablecoin Approval
A significant shift is taking place in the global financial landscape as Chinese tech giants JD.com and Ant Group are actively lobbying with China’s central bank to approve yuan-backed stablecoins. The goal of this effort is to challenge US dollar dominance in digital payments.
JD.com and Ant Group, two prominent players in the Chinese e-commerce space, have engaged in private meetings with People’s Bank of China (PBOC) officials. The aim is to persuade them to support the issuance of yuan-denominated stablecoins, which would be pegged to the value of the Chinese currency.
The move comes amid a backdrop where the yuan’s share of global payments has plummeted to 2.89% in May, marking its lowest level in nearly two years. On the other hand, the US dollar maintains a commanding 48% market share, as per Swift data.
Industry experts warn that inefficient yuan transactions pose strategic risks for China. Former Bank of China deputy head Wang Yongli emphasized that China faces serious problems if cross-border yuan payments remain less efficient than those offered by dollar-backed stablecoins.
The current stablecoin market is valued at over $258 billion, but a report from Standard Chartered projects it could reach as high as $2 trillion by 2028. An overwhelming majority of existing stablecoins are pegged to the US dollar, with more than 99% of the total supply held in USD-pegged tokens according to Bank for International Settlements data.
The push for yuan-backed stablecoins is driven by Chinese exporters’ increasing preference for USDT (Tether) over traditional transactions. The trend has hastened tech giants’ efforts to issue their own stablecoins and challenge the dominance of the US dollar.
JD.com, being one of the largest e-commerce companies in Asia, plans to apply for stablecoin licenses in Hong Kong and Singapore. This would enable it to launch offshore yuan tokens, further bolstering its digital payment capabilities.
Ant Group has also set its sights on securing licenses in these jurisdictions, with a focus on expanding its blockchain-based payments infrastructure across multiple regions.
The new digital asset framework announced by the Hong Kong government will come into effect starting August 1. As part of this initiative, the region is introducing a licensing regime for stablecoin issuers. This move aligns with China’s ambition to internationalize the yuan and gain more clout in global finance.
JD.com has reportedly received positive early feedback from regulators regarding its proposals. The company intends to initiate yuan stablecoin issuance in Hong Kong before expanding to free trade zones within China.
The stakes are high for both companies, as they seek to create an alternative to US dollar-pegged stablecoins.
Source: coincentral.com
