That surge began shortly after Washington passed the GENIUS Act, legislation designed to cement dollar-pegged tokens as a tool of U.S. financial power.
Now Beijing appears ready to answer. Industry sources say Chinese authorities are backing the development of yuan-linked stablecoins, with the aim of carving out influence in cross-border trade and reducing exposure to dollar sanctions.
Yuan Steps Onto the Blockchain
The first major step came with the debut of AxCNH, an offshore yuan token issued by Hong Kong fintech AnchorX and approved by regulators in Kazakhstan. The project runs on Conflux, a public blockchain capable of handling thousands of transactions per second and notable for being one of the few chains with the Chinese government’s blessing.
Unlike existing dollar-pegged tokens, AxCNH is designed for regional trade, particularly across China’s Belt and Road Initiative (BRI) network. By embedding the yuan into digital settlement rails, Beijing can extend its currency’s reach while offering partners an alternative to dollar-based infrastructure.
Beyond the Launch
Although the rollout attracted little immediate attention, analysts suggest its implications could be far‑reaching. The BRI spans more than 150 countries and trillions in infrastructure investment, giving China a ready‑made channel for pushing AxCNH into use. For participants, the token could streamline payments while avoiding the risk of being caught in U.S.-led sanctions.
Competing Visions
The United States and China are now advancing competing visions of digital currency dominance. Washington has placed its bet on dollar‑backed stablecoins, while Beijing is experimenting with yuan‑pegged alternatives that align with its long‑term goal of internationalizing its currency.
The contest may have only just begun, but the growth of the stablecoin market shows how quickly these instruments can gain traction once state‑level backing is involved. What looks like a quiet launch today may, in time, reshape how global trade is settled.
Source: Reuters