China Explores Stablecoins for Cross-Border Payments

TLDR

• China’s NPC discusses stablecoins for cross-border payment applications.
• Hong Kong’s sandbox allows regulated stablecoin issuance by corporations.
• JD.com and Alibaba test stablecoins pegged to the HKD.

China’s National People’s Congress (NPC) has begun formal discussions on utilizing stablecoins for cross-border payment applications. This exploration positions Hong Kong as a sandbox for these initiatives, allowing for the issuance of regulated stablecoins by both Chinese corporations and global partnerships.

Meanwhile, RLUSD, a regulated stablecoin, is reportedly expanding its presence in the Singapore market. This move is expected to enhance remittance and treasury flows dependent on specific corridors. No direct statements from RLUSD’s executives have been noted, but the expansion aligns with broader market movements favoring regulated stablecoin adoption for international transactions.

Key Figures and Institutions in Stablecoin Development

The People’s Bank of China (PBoC), with Governor Pan Gongsheng at the helm, publicly supports the potential of stablecoins, alongside Central Bank Digital Currencies (CBDCs), to streamline cross-border payments. Pan has stated that these technologies could significantly influence the future of the financial system.

Hong Kong’s regulatory landscape also plays a vital role, with the Hong Kong Monetary Authority (HKMA) having passed a stablecoin regulation framework in May 2025. This framework opened the licensing process to over forty potential stablecoin issuers, encouraging significant investment from fintech and payment industries.

Corporate and Regional Market Dynamics

Notable Chinese e-commerce companies, JD.com and Alibaba, have participated in Hong Kong’s stablecoin sandbox testing. Both companies plan to issue stablecoins pegged to the Hong Kong Dollar (HKD), also exploring the feasibility of offshore RMB options.

Wang Yongli, a former Vice President at the Bank of China, advocates for the launch of an offshore renminbi stablecoin. He warns that failing to keep pace with dollar stablecoins could limit the international use of the renminbi. Hong Kong’s regulatory activities aim to foster this international currency utility.

Significant Crypto Assets and Technology Impacts

Several stablecoins and blockchain ecosystems will serve crucial roles in these developments. Key stablecoins include RLUSD, USDT, and PayPal’s PYUSD, alongside HKD-pegged stablecoins. Layer 1 blockchains, such as Ethereum and Solana, are vital for supporting stablecoin issuance, providing essential infrastructure for these digital currencies.

While there is limited direct impact on major cryptocurrencies like Bitcoin, the ecosystems facilitating cross-border stablecoin transactions, including Ethereum and TRON, could experience indirect effects. Hong Kong’s stablecoin sandbox activity, led by JD.com and Alibaba, has reportedly increased transaction volumes for dollar- and HKD-pegged stablecoins.

Regulatory Frameworks and Future Considerations

Currently, no confirmed direct funding allocations or grant announcements have been made by the Chinese or Hong Kong governments concerning these stablecoin initiatives. Nevertheless, the process has prompted significant private sector investment, notably from fintech firms.

Institutional players like JD.com and Alibaba remain influential in spearheading these regulatory frameworks, leveraging Hong Kong’s evolving fintech sector to drive their agenda. RLUSD’s expansion plans in Singapore possibly involve local regulated payment institutions, though no explicit partnership figures have been released by official sources.

“If China fails to keep up with dollar stablecoins in terms of payment efficiency and clearing costs, then the progress toward international use of the renminbi could be limited.”

Wang Yongli