JD.com, Ant Group push yuan stablecoins to challenge US dollar dominance

JD.com and Ant Group are lobbying the People’s Bank of China (PBOC) to launch yuan-based stablecoins. Their goal is to counter the expansion of US dollar-pegged digital tokens globally.

The companies are specifically pushing for stablecoins backed by offshore yuan (CNH) to commence in Hong Kong. Regulatory sources indicate the firms argue these stablecoins would bolster the yuan’s role in international trade while curbing the dollar’s influence.

Inefficient Yuan Payments Risk Dollar Dominance

JD.com and Ant reportedly met recently with PBOC officials. During these private discussions, JD executives stressed the urgent need for yuan stablecoins to advance the currency’s international usage.

Both JD.com and Ant are reportedly preparing applications for stablecoin licenses in jurisdictions like Hong Kong and Singapore. Furthermore, JD.com has allegedly proposed launching yuan stablecoins in Hong Kong before piloting them in China’s free trade zones. Early regulatory feedback appears positive.

According to data from Swift, the dollar dominates global payments with a 48% share. The yuan’s share fell to a nearly two-year low of 2.89% in May, highlighting payment inefficiencies that threaten the yuan’s global standing.

Former Bank of China deputy head Wang Yongli warned that retaining an inefficient cross-border payment system compared to dollar alternatives poses a strategic risk for China.

Matters are accelerating in Hong Kong. Last week, the city unveiled its Digital Asset Strategy 2.0, known as LEAP. Part of this framework involves implementing a stablecoin licensing regime set to begin on August 1st. Governor Pan Gongsheng noted China aims for a “multipolar” global currency system.

The stablecoin market is dominated by dollar-pegged tokens. CoinMarketCap data shows a market capitalization exceeding $258 billion, with the top ten stablecoins all being dollar-denominated. EURC is the largest non-dollar stablecoin.