Author: Yang Tao, Deputy Director of National Financial and Development Laboratory
Source: National Financial and Development Laboratory
RMB Stablecoin Development Model Can Be "Integrated Internally and Externally"
Recently, PBOC Governor Pan Gongsheng pointed out at the 2025 Lujiazui Forum that blockchain and distributed ledger technologies are driving the robust development of central bank digital currencies and stablecoins, while also presenting enormous challenges to financial regulation. In fact, with Hong Kong's Stablecoin Ordinance set to take effect on August 1, discussions about stablecoins have recently reached unprecedented levels of enthusiasm.
Typically, offshore RMB business refers to financial transactions denominated and settled in RMB in overseas markets, which under policy guidance have developed with Hong Kong as the center and expanded to multiple points like Singapore and London. Onshore offshore RMB business reflects both "onshore" and "offshore" characteristics, with account management as its core operating mechanism, forming capital free flow under specific conditions. Correspondingly, many perspectives suggest piloting offshore RMB stablecoins in the Hong Kong market, and then exploring in domestic offshore markets represented by free trade zones once conditions mature.
We believe that stablecoins built on the Web3.0 world have already transcended traditional offshore and onshore categories. To better achieve strategic coordination, proactive supervision, and collaborative advancement, a linkage development model of onshore and offshore RMB stablecoins should be considered. The reasons are as follows: First, facing the rapid development of USD-backed stablecoins and the swift evolution of stablecoin regulations across countries and regions, China urgently needs to proactively research and respond to stablecoins from the perspectives of financial security and monetary sovereignty, systematically considering RMB stablecoin reform pilots, rather than passively responding through offshore RMB stablecoins. Second, the scale of Hong Kong's RMB offshore market is limited, and under the requirement of 1:1 reserve with legal tender, it may struggle to independently support RMB stablecoins achieving economies of scale. Third, stablecoin issuance and trading regulation involves numerous cutting-edge challenges such as identity authentication and anti-money laundering, with countries and regions actively promoting regulatory innovation and seeking solutions. In this regard, central departments should play a leading role in RMB stablecoin regulation while seeking coordination from Hong Kong regulatory bodies.
We observe that since its establishment on September 29, 2013, the Shanghai Free Trade Zone has basically established an institutional system aligned with international economic and trade rules. Meanwhile, central financial management departments are fully supporting Shanghai's international financial center construction towards a higher level, and the central bank has announced eight measures including conducting offshore trade financial service comprehensive reform pilots in the Shanghai Lingang New Area. Therefore, simultaneous promotion of RMB stablecoin innovative exploration in the Shanghai Free Trade Zone and Hong Kong can be considered.
Regarding onshore offshore RMB stablecoin (CNY Coin, CNYC), one model could involve establishing an RMB stablecoin issuance institution in the Shanghai Free Trade Zone, jointly initiated by clearing organizations, large commercial banks, top payment institutions, and renowned investment institutions. This would explore on-chain issuance and operational mechanisms for RMB stablecoins, and create a wholesale market for RMB stablecoins facing authorized institutions (such as digital RMB operating institutions with relatively rich innovative experience), with authorized institutions exchanging RMB stablecoins for qualified enterprises or individuals to construct a retail market.
The second model could rely on digital RMB operating institutions' branches in the Shanghai Free Trade Zone to directly mint and operate RMB stablecoins, fulfilling compliance responsibilities when redeeming them to specific qualified economic entities. Of course, if banks are the stablecoin issuance entities, overseas banks or related organizations exploring tokenized deposits have stablecoin-like characteristics but still differ from genuine stablecoin mechanisms. Some overseas banks addressing disintermediation challenges are also researching or attempting to establish technology subsidiaries or jointly set up relevant legal entities to explore legal tender stablecoin issuance, increasing ecological customer attraction and resisting crypto industry impacts. Therefore, RMB stablecoin exploration under this model still needs to clarify specific pathways and focus.
It must be noted that regardless of the model, several requirements must be simultaneously achieved. First, RMB stablecoins need sufficient asset reserves, including high-liquidity assets like RMB cash and short-term government bonds, and potentially setting a certain proportion of digital RMB reserves to achieve coordinated advancement with central bank CBDC reform pilots. Second, RMB stablecoin issuance entities must establish comprehensive risk identification, asset isolation and custody, and internal control compliance operational mechanisms, fulfilling relevant compliance obligations to direct customers and striving to collaborate in expanding RMB stablecoin application scenarios, effectively supporting free trade zone reform priorities. Third, fully leveraging the "electronic enclosure" characteristic of Shanghai Free Trade Zone FT accounts, through technological standard and smart contract innovative design, limit stablecoin holders and users during the pilot period to specific qualified institutions, enterprises, or natural persons.
Simultaneously, regarding offshore RMB stablecoin (CNH Coin, CNHC), under model one, promoting joint establishment of an RMB stablecoin issuance institution by domestic and foreign institutions in Hong Kong could be pursued. Under model two, allowing certain authorized domestic banks or payment institutions to mint and issue offshore RMB stablecoins through their Hong Kong-registered legal entities, complying with local regulations. This would form a dual RMB stablecoin system, borrowing existing cross-border payment and fund flow arrangements between mainland and Hong Kong to explore CNYC and CNHC exchange and interconnection mechanisms. In the short term, CNYC would primarily supplement and enhance cross-border trade and business payment settlement efficiency, while CNHC aims to further strengthen Hong Kong's position in RMB internationalization and can be compliantly used for on-chain financial activities and large commodity transaction settlements, especially actively exploring support for RMB asset-based RWA, thereby jointly committed to enhancing RMB and RMB asset global influence.
It should also be noted that domestic and foreign regulatory bodies and RMB stablecoin issuance institutions should collaborate closely, continuously promoting intelligent technology innovation, effectively identifying RMB stablecoin secondary market activities in the blockchain ecosystem, especially monitoring non-qualified domestic entities' RMB stablecoin holdings to prevent illegal fund flows and non-legal activities.
Of course, as the Bank for International Settlements (BIS) pointed out, stablecoins still have deficiencies in three key standards: singleness, elasticity, and integrity. RMB stablecoin reform exploration must strictly control risks, proceed gradually, maintain appropriate scale, and expedite relevant legal framework development to strengthen discourse power in global stablecoin legal negotiations. Looking forward, the "Finternet" proposed by BIS based on Unified Ledger construction can be referenced to simultaneously promote collaborative development and complementary win-win scenarios for digital RMB, bank tokenized deposits, and stablecoins.
