Beijing officials are warmed by the original equestrian idea driven by “fear of missing”

The US decision to accept cryptocurrency through laws like genius is not just domestic. The Washington movement is putting pressure on countries around the world to show their own stance on stubcoins and cryptocurrencies.

In recent months, financial staff and scholars in China say Zhiguo, a finance professor at Stanford University, is motivated by “a fear they missed.”

And on Friday, the self-driving Chinese city of Hong Kong is betting on cryptocurrency to strengthen its status as a financial centre, but it is beginning to accept applications for Hong Kong dollar-backed stubcoin, potentially opening the door to tokens supported by renminbi.

As the US is all-in on cryptography, Beijing is now facing a difficult decision. Does that coincide with a dangerous bet on a US stability-centered future? Or do you risk playing it safely and missing it? The cutting edge financial technology?

Crypto-Happy Us

Stablecoins are a bit boring, unlike their more volatile counterpart in the cryptocurrency space. These virtual assets are fixed at the value of reference assets, such as Fiat currency. largely All stablecoins It is fixed in the US dollar, the world’s reserve currency. Users can easily transfer funds between different cryptocurrencies without having to tap on Stablecoins to rely on actual money.

Users trust that the Stablecoin issuer has sufficient liquid reserves to redeem Fiat currency coins at any time. However, unlike banks, Stablecoin issuers do not have a lender for last resort. The collapse of 2022 Terrausd, The so-called algorithmic stable coins have spread concerns about other cryptocurrencies, including more established tokens.

The possibility that stablecoins could cause a cryptocurrency version of financial panic has led the government to be wary of the ridiculous things. But now, US President Donald Trump has been in his second term. I want to make it The US “Crypto Capital of the Earth.”

“Trump won 180 for the US and said, ‘deregulation, deregulation, settlement,'” said Kenneth Rogoff, a Harvard professor and former IMF chief economist.

The US Congress passed Genius act July 17th^thEstablishes the first regulatory framework for stubcoins on the dollar page. Activities Issuers should assist stablecoins on a at least 1:1 basis to maintain reserves such as cash and US Treasury bills.

China considers cryptography

The sudden, cryptographic attitude of the United States can cause concern for other countries. Dollar-backed stubcoin is attractive in “a truly poor country where people don’t trust currency or central banks.” King Dollar: The Past and Future of the World’s Dominant Currencies. But even countries with strong local currency could face a future where “citizens prefer to trade with this type of instrument.”

The People’s Bank of China (PBOC) is currently in an irritated position. China has banned all cryptocurrency trading since 2021. Quote The risk they can post to the country’s financial system.

But China doesn’t want to be behind the curve or behind the US if stability and blockchain technology are truly the future of finances.

“If the original cross-border payments are less efficient than stablecoins in dollars, it will be a strategic risk,” Wang Yongli, former vice president of the Bank of China, wrote to WeChat in June. Impressive Recommended According to the “active response from other countries, particularly China” is a “active response” to US law. Pekinology Newsletter.

PBOC Governor Pangong Shen also It’s attracting attention Increased use of Stablecoins for cross-border payments at the 2025 Lujiazui Forum held in Shanghai on June 18th.

A few days later, Securities Timenewspapers owned by a national media outlet People’s dailyIndustry officials said, “As a new payment tool, we cannot ignore the unique benefits and potential risks of stubcoin, and believe that (from renbi pages) will have to be developed sooner than later.”

South China Morning Post On July 14, China reported that it was investigating the possibility of allowing stubcoin to be launched. Two local officials told the newspaper that state-owned entities, including securities company Gutai Haitong and data infrastructure company Shanghai Data Group, are considering a trial version of the tokens raised by the yuan.

“It’s not the fact that the US is going to be in the crypto on its own,” says Evan Auyang, group president of the Animoca brand, a Hong Kong-based blockchain technology company. “It really started as a result of this change…stubcoins have become institutional” (The Animoca brand intends to apply for a license to issue Stablecoins in Hong Kong).

Derailed

There is a geopolitical element in the Stablecoin conversation. If adoption of US dollar stability increases, issuers will need to retain more dollars and dollar-based assets to support PEG. There was already a tether that issued the world’s largest stub coin The 7th largest buyer in the world of our debts in 2024.

After decades of cutting global domination of the dollar, China doesn’t want to give the US the opportunity to regain the ground.

“They are very concerned about the US gaining power and expanding its use of the dollar,” says Rogoff.

China has sought to promote greater use of renminbi for cross-border trade, but its success is limited. Trade with isolated countries such as Russia and Iran can take place in the yuan, but most countries around the world still prefer to use the US dollar. The popularity of Dollar Stablecoins could “suffocate” Beijing’s efforts to develop its own financial network, says Rogoff.

Trump’s trade war has spurred talk of “deco-option,” or a decline in dependence on the US dollar, due to concerns about the future of the US economy and the fear of the US weaponization. Even Trump himself is worried and threatening to challenge the dollar Large tariffs If you consider creating alternative currency, then for the BRICS block.

US Treasury Secretary Scott Bescent I said Its stability helps maintain the US dollar as the dominant reserve currency.

Some Chinese officials agree with Bescent. Former Deputy Finance Minister Zhu Gugangyao insisted in June that “the strategic objective behind promoting US stability is to maintain the dollar’s advantage, although tied to US dollar liquidity.” East is read Newsletter,

Can China launch stubcoin?

However, even if Beijing is open to launching Stablecoin, another hurdle must be overcome. This is a closed capital account.

“There are still many concerns about the capital flight issue,” says Auyang, which makes the liberalization of China’s capital accounts less likely.

China was able to approve a stubcoin that was pinned to the offshore renminbi (CNH). And since then Over 70% Offshore yuan payments were processed in Hong Kong of PBOC advisor Huang Yiping and proposed to use City As a test site for the launch of Chinese stubcoin. China’s technology giant jd.com It reportedly proposed a similar scheme in discussion with the PBOC.

Hong Kong’s Stubcoin Ordinance is scheduled to come into effect on August 1st^stif the PBOC chooses to go in that direction and offer, it has already established a legal framework to utilize the city’s offshore yuan pool. Enough fluidity For Stablecoin publishers paged with offshore yuan.

law Issuer required In order to keep a reserve in Stablecoin’s reference currency, the Hong Kong dollar itself is fixed in the US dollar, so HKD allows Geded Stablecoin issuers to retain their reserve in the US dollar.

“Hong Kong is still in the US dollar, so in a way, they’re basically helping the US,” he says, from Stanford. “This is probably Beijing. When I do HKD (Stablecoin), I want to do CNH too.”

“A sense of euphoria”

Currency experts are worried that Stubrecoin will pose a threat to the economy, whether it’s the US or China.

Blustein points to the risk of “currency replacement.” If the appeal of Stablecoins outweighs the appeal of local currency, he argues, “it ruins the central bank’s ability to control the economy,” as everyone is engaged in trading on equipment outside the bank’s manager.

And without a last resort central bank or lender, stubcoins are vulnerable to running. Users rush tokens redeem at once for Fiat currency. Possibility of The Stablecoin Crisis “is very parallel to the US Free Banking era in the 1800s,” says Rogoff.

“The risk of a financial crisis is high,” he says.

Blustein, on his part, isn’t worried that Stablecoins will ruin things. That’s because it constitutes a “small portion of international payments.”

He suggests that “Stablecoins will compete with central banks and multinationals because they probably won’t be able to buy many short-term finances.”

Another person expressing skepticism about stubcoin? The city’s city with Eddie Yue, head of Hong Kong’s monetary authority. in fact Central banker.

At last week’s press conference, Yue I told the public “Suppresses happiness” beyond stubcoins, pointing out “overly idealistic” debates about how to “disrupt the mainstream financial system.”