The emergence of virtual assets and blockchain-based financial infrastructure is reshaping the global monetary landscape. In this evolving ecosystem, stablecoins—digital currencies pegged to traditional fiat—are gaining prominence as tools for efficient cross-border transactions, financial inclusion, and currency internationalization. Among these, RMB-backed stablecoins are poised to play a transformative role, particularly within the strategic financial hub of Hong Kong.
Recent developments signal a pivotal shift. On June 25, Guotai Junan International (01788.HK), a Hong Kong-listed securities firm, announced that its wholly owned subsidiary, Guotai Junan Securities (Hong Kong), had successfully upgraded its Type 1 (Securities Trading) license from the Securities and Futures Commission (SFC) to include virtual asset trading services via a licensed platform. This upgrade enables the firm to offer comprehensive crypto-related services, including trading, advisory, and issuance of virtual asset products such as stablecoins and OTC derivatives.
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The market responded with unprecedented enthusiasm. On the announcement day, Guotai Junan International’s stock surged from HK$1.42 to close at HK$3.70—a staggering 198.39% gain—with a trading volume of HK$16.39 billion, adding HK$23.5 billion to its market cap. It became one of the top-performing stocks across mainland China and Hong Kong markets within days.
This momentum mirrors broader ambitions in the digital finance space. Just days earlier, on June 17, Richard Liu, Chairman of JD.com, revealed plans to apply for stablecoin licenses in major currency jurisdictions worldwide. His vision? To slash global corporate remittance costs by 90% and reduce transaction times to under 10 seconds, eventually extending to consumer-level payments.
These aggressive moves by both traditional financial institutions and tech giants reflect a shared recognition: the future of cross-border finance lies in digitally native, efficient, and compliant stablecoin infrastructure—and Hong Kong is emerging as a critical launchpad.
Regulatory Momentum: A Foundation for Innovation
The timing is no coincidence. On May 21, 2025, Hong Kong passed the Stablecoin Ordinance, set to take effect on August 1. This landmark legislation establishes a clear regulatory framework requiring:
- Stablecoins to be fully backed by high-quality, liquid reserve assets.
- Full redemption at face value upon demand.
- Licensing and oversight by the SFC for all issuers.
Similarly, the U.S. Senate advanced the Guidance and Establishment of American Stablecoin National Innovation Act on June 17, underscoring a global regulatory consensus: only trusted, transparent, and legally compliant stablecoins will be allowed to scale.
Under this framework, stablecoins effectively become digital shadow currencies of their underlying fiat—much like how the Hong Kong dollar has long mirrored the U.S. dollar through the Linked Exchange Rate System. But now, this linkage occurs not through centralized banking mechanisms, but via decentralized blockchain networks.
The Strategic Case for Offshore RMB Stablecoins
In the evolving hierarchy of global currencies, digital representation matters. Consider this classification:
- Natural money (e.g., gold)
- Supranational currencies (e.g., IMF SDR)
- Major sovereign currencies (USD, EUR, JPY, GBP)
- Regional currencies (e.g., RMB)
- Local legal tenders (HKD, MOP)
- Fiat-collateralized stablecoins (USDT, USDC)
- Niche or less-traded fiat currencies
The more stablecoins tied to a given currency exist, the larger its digital monetary footprint—its “sphere of influence” in the digital economy.
And the RMB’s position is strengthening:
- Second-largest currency in global trade financing
- Third-largest payment currency by total volume
- Third-highest weighting in the IMF’s SDR basket
Yet despite these gains, RMB-denominated stablecoins remain underdeveloped, especially compared to USD-backed counterparts like USDT and USDC, which dominate over 98% of the fiat-collateralized stablecoin market.
This gap presents both a challenge and an opportunity—one that Hong Kong is uniquely positioned to address.
Why Hong Kong Is the Ideal Launchpad
1. Regulatory Clarity and Market Readiness
With the Stablecoin Ordinance coming into force in August 2025, Hong Kong offers one of the world’s first legally sound environments for issuing RMB stablecoins. Combined with its status as a global financial center and common law system, this creates an ideal sandbox for innovation.
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2. Largest Offshore RMB Hub
Hong Kong holds over RMB 1 trillion in offshore deposits, serving as the primary conduit for RMB internationalization. Its deep integration with mainland China’s economy—and high volume of cross-border trade—creates natural demand for fast, low-cost settlement solutions.
An RMB-backed stablecoin issued in Hong Kong could power instant settlements between大湾区 (Greater Bay Area) businesses, reducing reliance on slow correspondent banking systems.
3. Bypassing Traditional Payment Bottlenecks
As Governor Pan Gongsheng of the People’s Bank of China noted at the Lujiazui Forum, traditional cross-border payments suffer from inefficiency, high cost, and vulnerability to geopolitical weaponization (e.g., SWIFT sanctions). A blockchain-based RMB stablecoin offers a resilient alternative, enabling direct peer-to-peer transfers outside traditional rails.
When integrated with existing initiatives like the Cross-Border Payment Connect, such stablecoins can further accelerate settlement cycles and improve liquidity management.
4. Differentiation Amid Dollar Dominance
While USD stablecoins enjoy first-mover advantage due to network effects, RMB stablecoins can carve out niches in specific corridors—starting with Belt and Road Initiative (BRI) trade routes and expanding into Southeast Asia and Africa.
By focusing on real-world trade use cases rather than speculation, RMB stablecoins can build utility-driven adoption.
5. Complementing Central Bank Digital Currency Efforts
The mBridge project, led by the BIS Innovation Hub (Hong Kong), PBOC, HKMA, Bank of Thailand, and UAE Central Bank, aims to create a multi-CBDC platform for instant cross-border settlements. While CBDCs serve institutional wholesale needs, offshore RMB stablecoins can serve retail and commercial use cases, creating a dual-track system that enhances overall financial resilience.
They operate under different issuance models—one state-led (CBDC), one market-driven (stablecoin)—but can coexist and even interoperate.
Frequently Asked Questions (FAQ)
Q: What is an RMB-backed stablecoin?
A: It’s a digital token pegged 1:1 to the Chinese yuan (RMB), backed by liquid reserves like cash or short-term government bonds, and designed for fast, secure transactions on blockchain networks.
Q: Is it legal to issue RMB stablecoins in Hong Kong?
A: Yes—under the new Stablecoin Ordinance effective August 1, 2025, licensed entities can issue fiat-referenced stablecoins if they meet strict capital, custody, and redemption requirements.
Q: How does it differ from China’s digital yuan (e-CNY)?
A: The e-CNY is a central bank digital currency issued by the PBOC for domestic use. An offshore RMB stablecoin would be privately issued in Hong Kong for international trade and settlement purposes.
Q: Can it help reduce reliance on SWIFT?
A: Absolutely. By enabling direct blockchain-based transfers between counterparties, RMB stablecoins can bypass traditional messaging systems and correspondent banks entirely.
Q: Will it threaten capital controls in mainland China?
A: Not if properly designed. Offshore issuance in Hong Kong operates under separate regulatory oversight and doesn’t grant free convertibility into onshore RMB without compliance checks.
Q: Who benefits most from RMB stablecoins?
A: Exporters and importers in emerging markets, SMEs engaged in cross-border e-commerce, Chinese companies expanding overseas, and financial institutions seeking efficient settlement rails.
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Final Thoughts: Technology Is the Tool—Power Determines the Outcome
While stablecoin infrastructure may seem technical or niche today, it represents a strategic lever in the broader contest for monetary influence. The race isn’t just about technology; it’s about extending economic sovereignty into digital domains.
In this context, launching RMB-backed stablecoins from Hong Kong isn’t merely a financial experiment—it’s a step toward securing China’s long-term position in a multipolar digital monetary order.
Ultimately, while innovation drives adoption, national comprehensive strength determines longevity. Stablecoins are tactics; economic power remains the strategy.