Stablecoins, the digital tokens pegged to traditional currencies, are shaping up to be the next major battleground between the US and China. Both powers are racing to influence the future of money and global payments as stablecoins become more widely used by businesses, consumers, and financial institutions.
China’s Hong Kong Testbed
Beijing is using Hong Kong as a proving ground for stablecoins, allowing the territory to roll out the first comprehensive regulatory framework. New legislation requires issuers to be licensed, and dozens of companies have already applied to launch tokens backed by the Hong Kong dollar or offshore renminbi. Officials want these coins tied to energy, commodities, and cross-border trade — while keeping tight restrictions inside mainland China. The aim is to build a controlled system that promotes the renminbi internationally without losing grip on domestic flows.
By 2027, Beijing’s roadmap calls for an integrated energy–AI system, with at least five large AI models deployed across power grids, coal, oil, and gas. Stablecoins are expected to play a role here, linking tokenized money to programmable energy and data systems.
US Pushes Dollar Stablecoins
The United States has taken the opposite approach — encouraging dollar-backed stablecoins to expand global dollar dominance. New rules passed this summer give clear guardrails for issuers and are already boosting demand for US Treasuries, since reserves must be held in safe assets. This has reinforced the dollar’s grip as the backbone of most stablecoins and positioned the US to integrate them into mainstream finance.
Crypto markets have dubbed this the “summer of stablecoins,” as institutional adoption accelerates and banks prepare for broader use of tokenized dollars in payments and settlements.
A Battle for Payment Power
The rivalry is not just about technology — it’s about power. Beijing sees dollar-pegged stablecoins as an extension of US control over global money flows, especially as Washington uses financial dominance to enforce tariffs, sanctions, and capital restrictions. By experimenting in Hong Kong, China hopes to engineer an alternative model, one that chips away at dollar supremacy.
The US, on the other hand, views the rise of regulated dollar stablecoins as a way to entrench its influence for the next generation of digital payments. By pulling these assets into its regulatory perimeter, Washington can preserve oversight while expanding reach.
What’s Next
The next two years will be decisive. If Hong Kong’s framework succeeds, Beijing could scale stablecoin adoption to boost yuan internationalization, while embedding features like spending limits and geofencing directly into the code. In the US, dollar stablecoins could cement their place in financial infrastructure as regulators finalize oversight and global banks adopt them for faster settlements.
Stablecoins have moved from being a niche crypto product to the center of global finance. Now, they’re becoming another arena where Washington and Beijing fight to shape the rules of money, trade, and power in the digital age.
Disclosure: This article does not represent investment advice. The content and materials featured on this page are for educational purposes only.
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