China turns attention to stablecoins role in cross-border payments

Wang Xin, the director-general of the People’s Bank of China’s Research Bureau, stated during the 2026 Lujiazui Forum that regulators need to track the effect of stablecoins on international payments.

The executive’s comments came as Beijing remains cautious about privately issued digital tokens even while it prepares state-controlled infrastructure for the globalization of the digital yuan.

Financial institutions flock to China’s new digital yuan platform

Speaking during a session on global financial governance at the 2026 Lujiazui Forum, Wang Xin, the director-general of the People’s Bank of China’s Research Bureau, said that cross-border investment and trade depend on payment systems that are efficient, diverse, and resilient.

However, he also mentioned the risk that payment channels pose, as they could be turned into geopolitical weapons for the purpose of disrupting normal cross-border commerce.

Wang said that alongside stablecoins, central bank digital currencies (CBDCs) used across borders also require observation and policy cooperation between governments.

Hours after Wang’s remarks, 26 financial institutions signed agreements to become the first direct participants on CBETS, a blockchain-based cross-border platform operated by e-CNY Center International Co. The platform connects the participating banks to payment and digital fiat currency systems across multiple jurisdictions.

The financial institutions include Standard Chartered Bank (China) and overseas branches of Chinese banks in Thailand, Singapore, Laos, the United Arab Emirates, Qatar, Brazil, Hong Kong, and Macao. CBETS offers round-the-clock settlement using both on-chain and off-chain smart payment tools.

Fu Yifu, a researcher at Jiangsu Su Merchants Bank, told China Daily that CBETS could cut settlement times from days to seconds by using distributed ledger technology and a central bank direct-connect system.

Peer-to-peer clearing removes the layered fees charged by correspondent banks, and smart contracts make transactions traceable, reducing money laundering risk.

Bank of Communications, one of the first participants, said it has also partnered with a Malaysian institution to let foreign visitors pay with digital yuan through overseas e-wallets.

Should China be worried about stablecoins?

The Council on Foreign Relations published an analysis in August 2025 arguing that dollar-backed stablecoins are a problem for China’s capital controls. The U.S. GENIUS Act, which was signed in July 2025, created a system for programmable digital dollars to circulate freely between wallets worldwide.

Some forecasts cited by CFR project as much as $1.75 trillion in new dollar-backed stablecoins entering circulation in just three years since the law was passed. For Beijing, that volume threatens to create a channel for transacting in dollars that the authorities cannot easily control or monitor.

However, Cryptopolitan previously reported that mainland China is building around a state-issued digital currency while Hong Kong is pursuing a licensing regime for private stablecoin issuers.

In February 2026, the People’s Bank of China (PBOC) and seven other agencies banned unauthorized yuan-pegged stablecoins in both onshore (CNY) and offshore (CNH) markets.

The same directive introduced joint liability for Chinese tech firms, marketing companies, and payment providers that assist unauthorized stablecoin or tokenization projects, even when those projects operate abroad.

Beijing eliminated a key advantage private stablecoins held over the government-backed token by reclassifying the digital yuan as “digital deposit money” on January 1, 2026. Now, commercial banks are required to pay interest on verified e-CNY wallets, bringing them under national deposit insurance.

Hong Kong, meanwhile, has been reviewing dozens of applications under its Stablecoins Ordinance. The Hong Kong Monetary Authority (HKMA) is expected to grant its first batch of licenses to fewer than four institutions, and the first two have already been granted to the Hongkong and Shanghai Banking Corporation (HSBC) and Anchorpoint Financial Limited.

Circle CEO Jeremy Allaire has said that the company is pursuing a license to operate the dollar-backed stablecoin in the territory.

A licensed issuer needs at least HK$25 million in paid-up share capital, and every stablecoin issued must be fully backed by high-quality liquid assets held separately from the issuer’s own money. Holders must also be able to redeem stablecoins at par value without unreasonable fees.