The global stablecoin shadow war, how will China choose?

By the end of summer 2025, the global stablecoin market capitalization will exceed 2.3 trillion USD. USDT and USDC dominate cross-border payments and the crypto market, but China's presence remains vague. This is not due to technological lag, but rather a game of monetary sovereignty and digital financial innovation. As stablecoins become the "invisible dollar" of the digital age, the cost of China's absence is quietly seeping into the financial bloodstream.

The Cost of Absence: The Dual Squeeze of Wallet and Voice

The predicament of Shenzhen foreign trade businessman Boss Chen is a microcosm of China's absence in the stablecoin.

Cross-border settlement reality: European customers insist on using USDC, instant arrival, and transaction fees are 90% lower than wire transfers.

Digital Renminbi Cross-Border Version: Technically feasible, but limited by foreign exchange controls and insufficient liquidity.

80% of global cross-border crypto transactions are priced in stablecoins, with emerging market companies using them to hedge against USD volatility, and even Saudi oil futures accepting USDC quotes. China is absent under strict regulations, not only losing pricing power but also potentially being pushed to the fringes of negotiations in future digital finance rule-making.

Technology VS System: The Inherent Conflict Between Decentralization and Monetary Sovereignty

Blockchain genes: decentralization, node consensus, immutability

Monetary sovereignty background color: centralized control, currency supply management, interest rate policy adjustment

The digital renminbi (DC/EP) adopts a dual-layer operating model (central bank–commercial bank), retaining centralized management and traceable transactions while sacrificing some efficiency for policy precision. For example, during last year's economic recovery period, the central bank used DC/EP data to identify financing bottlenecks in small and micro enterprises and directed 800 billion yuan in loans within three months.

In contrast to stablecoins:

Algorithm anchoring: Potentially vulnerable to attacks (a stablecoin flash crash case in 2023)

Asset reserve anchoring: potential misappropriation (USDC once plummeted 15% in a single day due to rumors of the custodian bank's bankruptcy)

Dollar Dependence: Most stablecoins are ultimately still pegged to the dollar, reinforcing the "Digital Dollar Chain."

Function Anchor: Radical "Break" and Steady "Establish"

Radical Proposal:

A fully decentralized algorithmic stablecoin pegged to USDT.

Advantages: Can bypass the US dollar and reconstruct cross-border payments with DeFi.

Risk: The trust chain is fragile, LUNA collapsed (2022) evaporating 40 billion USD.

Stable Plan:

Issuing a "cross-border extended version" stablecoin pegged to the Renminbi

Example: The cross-border version of the digital renminbi (e-CNY) is being trialed in ASEAN, directly connecting with domestic banks, with real-time exchange rates and controllable funds.

Advantages: Retain blockchain efficiency and safeguard the bottom line of monetary sovereignty.

Conclusion: The shadow war will eventually pass, the bottom line cannot be loosened

The stablecoin cold war is essentially a battle for monetary sovereignty in the digital age. China is not lacking in technology; what it lacks is a balance between openness and security.

Things to do: Research stablecoin technology, pilot a controllable version.

Things that cannot be done: relinquishing monetary policy autonomy, weakening the financial firewall.

At a critical period of reshaping the global digital financial landscape, China must ensure the safety of its wallet and not allow its monetary sovereignty to become a "pawn" in the games of other countries.