Opinion | Hong Kong developing a yuan-pegged stablecoin would be a game changer

In a world of dollar-pegged stablecoins, the case for yuan-based alternatives – and what it means for the future of money – is compelling

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Published: 5:30am, 17 Jun 2025Updated: 7:44am, 18 Jun 2025

In just the past month, stablecoin has moved from the fringes of cryptocurrency into the heart of mainstream finance.

Hong Kong enacted its stablecoin ordinance, creating a regulatory framework to legitimise and support the issuance of stablecoins, while US lawmakers discuss similar legislation aimed at fostering large-scale stablecoin adoption. Meanwhile, stablecoin issuer Circle Internet Group made headlines when it went public in New York, with the stock price surging 168 per cent on debut.

These developments are not only pivotal to the cryptocurrency industry but also signal a transformative shift in global finance. Yet a deeper question lies beyond: what does this mean for the future of money, regulation and international economic power dynamics?

Stablecoin was initially designed as a shelter from the volatility of cryptocurrencies like bitcoin and ether. It provides a way to store value without exposure to wild price swings, enabling seamless transitions between assets in the decentralised economy without needing to convert back to real-world fiat currencies such as the US dollar. Its appeal has evolved far beyond that original purpose.

Today, stablecoin offers efficiency in cross-border payments, programmability through smart contracts and a bridge between the banking system and emerging decentralised finance (DeFi) platforms. In essence, it represents a new form of digital liquidity that operates outside the constraints of traditional banking infrastructure.

Their rising prominence also reflects broader macroeconomic trends. With interest rates at multi-year highs, stablecoin issuers can invest reserves in high-quality liquid assets such as Treasuries – US government bonds – to generate substantial returns. For example, Circle reported US$1.7 billion in interest income last year alone. This profitability elevates stablecoin from a mere transactional tool to a strategically valuable asset for private enterprises and governments alike.