China Enters the Stablecoin Race

The move highlights Beijing’s ambition to strengthen the yuan’s role in international finance. Yet, experts warn the path is far from easy. The digital yuan has so far failed to gain traction, largely due to the dominance of Alipay and WeChat Pay in everyday transactions.

Martin Chorzempa from the Peterson Institute believes the most significant use case for a yuan-backed stablecoin could be cross-border payments. “If yuan stablecoins circulate, could this allow people to transfer money in ways they couldn’t through traditional banks?” he asks.

But the main challenge lies in trust. As Chorzempa notes, China is known for its anti-crypto stance. If this new stablecoin comes with the same restrictions and surveillance as the current yuan, it may struggle to compete with the US dollar, which remains far more freely usable.

Dollar Dominance Remains Hard to Break

The market challenges are just as steep. Patrick Tan, CEO of ChainArgos, points out that 98% of all stablecoin transactions are dollar-based. Despite China’s close ties to major crypto exchanges like Binance, OKEx, and Bybit, these platforms overwhelmingly rely on dollar-backed stablecoins.

According to Tan, the issue is structural: “If China wants to make the digital yuan attractive, it must first make the yuan itself attractive. That requires deep political and economic reforms, which under current conditions are extremely difficult.”

A New Front in the Global Contest

Whether China’s stablecoin initiative succeeds or fails, one thing is clear: stablecoins are no longer just part of crypto infrastructure. They have become tools in a larger geopolitical competition over the future of money.

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Details of the Ads

According to a report by Sina Finance on December 12, some Alipay users in mainland China noticed promotional ads about spot Bitcoin ETFs on their homepages. The ads included slogans such as:

“Global investment, cryptocurrency soaring, minimum investment of 10 yuan—get on board now!”

The advertisements directed users to Huabao Overseas Technology C (QDII-FOF-LOF), a fund that allegedly has indirect exposure to Coinbase stock and the ARK 21Shares Bitcoin ETF.

Investment Limits and Observations

Prominent Chinese market analyst Colin Wu commented on X (formerly Twitter) that mainland users can currently purchase up to 1,000 yuan ($137) worth of the fund daily, with a minimum investment of 10 yuan ($1.40).

Wu noted that the fund indirectly invests in Coinbase stock and the ARK Bitcoin ETF through Cathie Wood’s fund. He also pointed out that Huabao Technology and other QDIIs are running similar crypto-related ads on Alipay.

You Might Be Interested In: Elon Musk Talks About the Name of a New Memecoin!

The ads have sparked speculation among some users, with one stating:

“The next step might be buying Bitcoin directly with Alipay.”

Potential Implications

According to Yifan He, CEO of blockchain firm Red Date Technology, Alipay’s parent company, Ant Financial Services Group, already offers US ETF trading services, so featuring a Bitcoin ETF might not be unexpected.

He suggested that the ads are likely third-party promotions rather than direct offerings from Alipay, adding:

“As long as the yuan cannot be moved out of the country illegally, regulators are unlikely to see this as a significant risk.”

He also predicted that the ads would disappear soon, labeling them as the result of third parties exploiting loopholes.

Regulatory History and Context

Alipay officially banned Bitcoin-related transactions in 2019, aligning itself with the Chinese government’s anti-crypto policies. Since 2017, mainland China has prohibited crypto exchanges, with a sweeping crackdown on cryptocurrencies enforced in 2021.

Despite the government’s firm stance, crypto assets have been repeatedly recognized as legal properties protected under Chinese law.

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