China Utilizes Seized Cryptocurrency in Hong Kong Sales; Hong Kong Intends to Launch Stablecoins for the Belt & Road Initiative
In a significant move towards advancing its global economic agenda, China is actively promoting the use of a yuan-backed stablecoin for cross-border payments within its Belt and Road Initiative (BRI). This strategy complements but is distinct from China's digital renminbi (e-CNY) strategy.
In July 2025, the Conflux Network, a Chinese public blockchain, launched a new stablecoin pegged to the offshore yuan (CNH). This stablecoin, designed for cross-border trade and settlement among over 150 countries involved in the BRI, is supported by partnerships with fintech firms AnchorX and Eastcompeace and integrated with wallets like TokenPocket. Pilot projects are already planned in Central and Southeast Asia.
This stablecoin approach aligns with China’s broader dual-track strategy. While promoting the internationalization of the renminbi through conventional channels, China is also leveraging stablecoins and digital currencies to enhance payment efficiency and evolve the global payment system. Stablecoins offer a means to reduce costs and simplify settlement processes in the global trade environment dominated by BRI.
On the other hand, the digital renminbi (e-CNY) represents China’s central bank digital currency (CBDC) initiative aimed at domestic and, eventually, controlled cross-border use. In Hong Kong, efforts are underway to pilot a digital yuan stablecoin, providing a regulatory and infrastructural testbed for further regional adoption and interoperability.
China's approach to disposing of confiscated cryptocurrencies contrasts sharply with approaches in jurisdictions like the United States. Beijing is using licensed cryptocurrency exchanges in Hong Kong to sell confiscated digital assets, with the exact amount estimated to reach tens of billions of dollars.
The preference for stablecoins over the digital renminbi may be due to their faster implementation speed. China could encourage stablecoin payments through permissionless blockchain networks or its Blockchain-based Service Network (BSN). The BSN hosts non-crypto versions of popular permissionless blockchains like Ethereum, Cosmos, and Polygon, supporting stablecoins while excluding other cryptocurrencies.
Stablecoins could be particularly useful for countries with volatile local currencies, making them unattractive for China to engage with. They are proposed as a solution to break through existing bottlenecks in cross-border payments for Chinese infrastructure projects.
A mainland think tank is considering China's payment preferences, including the use of stablecoins. The international arm of the BSN shares Red Date Technologies as a common participant in the BSN Spartan Foundation, with close ties to Hong Kong through Red Date. China plays a key role in mBridge, a cross-border payment platform for CBDC transactions.
Integrating new countries into mBridge typically requires months or years of technical and regulatory preparation. Hong Kong has unveiled comprehensive stablecoin regulations set to take effect in August. The Beijing Equity Exchange (CBEX) is instructed by Beijing's law enforcement division to dispose of the cryptocurrencies.
China has developed its central bank digital currency, the digital renminbi, which has been successfully used for cross-border payments. China is currently considering the use of stablecoins for cross-border payments within its Belt and Road Initiative.
Together, these efforts illustrate a complementary, multi-layered digital currency ecosystem supporting China's global economic agenda.
- The Conflux Network, a Chinese public blockchain, has launched a new stablecoin pegged to the offshore yuan (CNH) for cross-border trade and settlement among over 150 countries involved in the BRI.
- China's approach to cross-border payments in the BRI complements its digital renminbi (e-CNY) strategy, with the preference for stablecoins over the digital renminbi potentially due to their faster implementation speed.
- China is considering the use of stablecoins for cross-border payments within its Belt and Road Initiative, demonstrating a multi-layered digital currency ecosystem supporting its global economic agenda.
- Hong Kong has unveiled comprehensive stablecoin regulations set to take effect in August, which may influence the integration of new countries into cross-border payment platforms like mBridge.
- Beijing is using licensed cryptocurrency exchanges in Hong Kong to sell confiscated digital assets, with the exact amount estimated to reach tens of billions of dollars.
- China plays a key role in mBridge, a cross-border payment platform for CBDC transactions, and is currently considering the use of stablecoins to break through existing bottlenecks in cross-border payments for Chinese infrastructure projects.
