China relaxes restrictions on stablecoins? Which national-level Blockchain can become the technical foundation?

In today's world where major global economies are increasingly viewing stablecoins as a new strategic track, a silent competition around Digital Money has already begun. As places like the United States and the European Union compete to introduce regulatory frameworks in an effort to seize the initiative, China's movements appear particularly noteworthy and complex. According to reports from several foreign media outlets, relevant Chinese departments have quietly convened experts in the field over the past few months to engage in in-depth discussions regarding the issuance of a stablecoin pegged to the Renminbi.

This move creates a seemingly contradictory tension with its strict regulatory policies on virtual asset trading within the country. However, behind this lies a well-thought-out national strategy: to prevent the potential risks that uncontrolled digital assets pose to the financial system while eagerly seizing the historical opportunity presented by blockchain technology to create a brand new "digital ark" for the internationalization of the RMB.

So, why is China testing stablecoin at this time? Who will ultimately build its technical foundation? A competition for blockchain infrastructure led by the "national team" has quietly begun.

Test stablecoin

China's exploration of stablecoins is not a temporary whim, but rather stems from a profound insight into changes in the global financial landscape and long-term considerations.

1. Responding to the challenges of the dollar system Currently, the global stablecoin market is dominated by Tether (USDT) and Circle (USDC), which are pegged to the US dollar. This means that in the thriving digital economy, the influence of the US dollar is being further solidified and extended. A deeper consideration is that traditional cross-border payment systems like SWIFT may potentially be used as tools of restriction under specific geopolitical contexts. Therefore, exploring the issuance of a stablecoin supported by the Renminbi is seen as a possible path. Its strategic intent is to establish a separate, efficient cross-border payment network from the existing systems, particularly in enhancing the convenience and attractiveness of the Renminbi in global trade, especially in supporting trade settlements in countries along the "Belt and Road".

2. The exploration path with "Chinese characteristics" The intrinsic attributes of stablecoin technology exhibit a natural tension with China's demand for "prudent management" of its financial system. According to informed sources involved in the discussions, regulatory bodies such as the People's Bank of China maintain a highly cautious attitude towards the potential impacts of stablecoins on cross-border capital flow management. The "decentralized" nature of blockchain technology implies that the flow of funds is difficult to be fully controlled by a single entity. However, any stablecoin project permitted in China must conform to its "specific national conditions." This also explains why China's exploration is not a simple replication of the models of global public chains like Ethereum, but rather leans towards the development of a public infrastructure that is guided by the state, involves multiple parties, and is ultimately "autonomously controllable."

3. Hong Kong as a "testing ground" In this context, Hong Kong's role becomes crucial. Hong Kong is actively launching a stablecoin regulatory framework, attracting numerous institutions, including JD.com and Standard Chartered Bank, to apply for issuance licenses. The Hong Kong Monetary Authority (HKMA) has also not ruled out the possibility of approving stablecoins pegged to the Renminbi. This makes Hong Kong an ideal "regulatory sandbox" and "testing ground." Here, China can test the issuance of stablecoins linked to offshore Renminbi (CNH) in an environment that aligns with international standards but is manageable in terms of risk, accumulating regulatory and operational experience without directly affecting the financial stability of the mainland.

"National-level" public chain

The issuance of any stablecoin is inseparable from a secure and efficient underlying blockchain network. Since blockchain was elevated to a national strategic height in 2016, a blockchain infrastructure map led by the "national team" has already taken shape. Among many competitors, the following four platforms are considered to have the most potential, becoming the technological foundation for carrying China's stablecoin vision.

1. Blockchain Service Network (BSN): Global Connector and the "No Coin" Concept The BSN, initiated by the National Information Center, China Mobile, China UnionPay, and other units, is positioned as a global blockchain public infrastructure. Its core innovation lies in the unified adaptation and management capabilities of dozens of mainstream blockchain underlying frameworks globally, akin to a universal "operating system" for the blockchain world. However, BSN has consistently upheld the concept of a "non-coin public chain," and its executive director of the development alliance, He Yifan, CEO of Hongzao Technology, has publicly expressed extreme aversion to virtual currency multiple times. This concept may become a significant constraint on its ability to accommodate native token forms of stablecoins.

2. "Xinghuo·Chain Network": Supported by the Ministry of Industry and Information Technology, focusing on the industrial sector The "Spark·Chain Network" led by the China Academy of Information and Communications Technology is a national-level new type of integrated blockchain infrastructure. Its application scenarios are highly focused on the industrial internet, such as product traceability and supply chain collaboration. It is a permissioned public blockchain network, also without a token design. Its focus on specific industries makes it potentially more suitable for carrying specific use cases rather than general payment stablecoins.

3. Chang'an Chain (Chain Maker): The "Chosen One" backed by state-owned enterprises and internet giants. The background of the "Chang'an Chain" can be described as star-studded. Its ecological alliance is guided by the Beijing municipal government and includes key state-owned enterprises in critical sectors such as State Grid and China Construction Bank, as well as internet giants like Tencent and Baidu. It has been included multiple times in the government work reports and development plans of Beijing. Technically, the official claim states that its transaction throughput capability (TPS) can reach 100,000 levels. More importantly, its research and development institution, Microchip Institute, signed a strategic cooperation agreement with the Central Bank's Digital Currency Research Institute in 2021 to jointly promote enterprise-level applications of the digital renminbi based on the "Chang'an Chain". This gives it an unparalleled natural advantage in the application of stablecoins in inter-institutional or specific scenario contexts.

4. Tree Graph Chain (Conflux): The "lone seedling" of public chains under regulatory exceptions. Unlike the first three, which have obvious characteristics of alliance chains, "Tree Graph Chain" is currently the only public chain in China operating within a regulatory framework, with a native token (CFX). It is led by Turing Award winner Academician Yao Qizhi as the chief scientist, and its core team members come from Tsinghua University's "Yao Class", boasting strong technical capabilities. More importantly, Tree Graph Chain is actively cooperating with the fintech company AnchorX to explore the issuance of a stablecoin (AxCNH) anchored to the offshore RMB to support cross-border payment needs. This clear strategic layout has positioned it in a valuable first-mover advantage in the international stablecoin sector.

dual-track parallel

In addition to the aforementioned blockchain networks with strong endorsements, there are also several alliance chains in China, such as State Grid Chain (国家电网), Unicom Chain (中国联通), China Mobile Chain (中国移动), ICBC Chain (工商银行), Ant Chain (蚂蚁集团), Zhixin Chain (腾讯), and Zhongxiang Chain Network. Most of these alliance chains are initiated by state-owned enterprises or technology giants, each having unique advantages and influence in their respective fields.

But back to the original topic, does China have a public chain that has international influence? As of now, the answer should be lacking. The main reason is that most of China's blockchain networks are consortium chains, which have significant differences in consensus mechanisms and economic models compared to overseas public chains like Ethereum and Solana.

Overall, the path of stablecoins in China is unlikely to have a "winner takes all" scenario, but is more likely to be a dual-track parallel development path, with each fulfilling its role.

Internationally oriented, Conflux may take the lead. With its internationally accepted public chain attributes, existing token ecosystem, and a clear offshore RMB stablecoin exploration plan, Conflux is most likely to become the vanguard for China's stablecoin "going out" and participating in global competition.

Based in China, Chang'an Chain (Chain Maker) has enormous potential. Relying on its strong ecosystem of central state-owned enterprises and technology giants, as well as deep cooperation with the digital renminbi system, "Chang'an Chain" is highly likely to become the technological foundation for the issuance of renminbi stablecoins in domestic enterprise-level applications, B2B payment settlements, and other scenarios.

The competition surrounding the stablecoin technology base is essentially not about replicating a Chinese version of Ethereum, but rather about creating a digital financial infrastructure that meets national strategic needs, serves the real economy, and is independently controllable. The curtain on this great power chess game has just been raised, and it deserves the continued attention of the global market.