In recent weeks, Chinese tech giants such as JD.com and Alibaba affiliate Ant Group have been lobbying the Chinese central bank to authorise yuan-based stablecoins as a counterbalance to the growing dominance of US dollar-linked cryptocurrencies.
On behalf of Fireblocks, one of the world’s most trusted digital asset infrastructure providers, insights from Dea Markova, Director of Policy, shed light on the implications of offshore yuan-backed stablecoins in Hong Kong.
“Right now, the stablecoin narrative, much like stablecoin liquidity, is overwhelmingly dominated by the US dollar. The new US administration is more convinced than most governments that stablecoins can strengthen role of their domestic currency in global trade and boost demand for sovereign debt.
If there’s going to be any credible counterweight to the USD narrative, it will have to come from Mainland China and from Hong Kong.”
— Dea Markova, FireblocksHong Kong’s more permissive stance toward digital assets under the ASPIRE and LEAP frameworks reflects this geopolitical reality. Still, Hong Kong remains a high-performing regulatory regime, with strict guardrails on issuance, brokerage, and custody.
Concerns extend to retail deposit outflows, as seen in the EU and UK, and potential capital flight from Mainland China. However, US policy momentum is pushing both Beijing and Hong Kong to reassess their risk appetite in a controlled way. Initial steps may involve HKD-backed stablecoins from a small group of licensed issuers, supported by regulated custodians.
For global issuers, the most attractive regimes are those with flexible reserve asset rules. The US currently leads, permitting 100% allocation to T-bills, while Hong Kong’s clarity is drawing strong interest despite stricter rules.
Ultimately, scaling any stablecoin market comes down to two questions: who will move the stablecoins, and who will safeguard them. For yuan-backed stablecoins, those answers will depend on geopolitics as much as technology.