China has taken significant steps to bolster its digital currency ambitions, opening an international operations center for the digital yuan (e-CNY) in Shanghai while rolling out the AxCNH stablecoin in Kazakhstan. These initiatives, announced in late September 2025, aim to enhance cross-border payments, leverage blockchain infrastructure, and position the yuan as a stronger contender in global finance amid intensifying competition with U.S. dollar-backed stablecoins.

The Shanghai center, managed by the People’s Bank of China’s (PBOC) Digital Currency Institute, officially began operations on September 25, 2025. It oversees three key platforms: a cross-border payment rail for e-CNY transactions, a blockchain service platform enabling on-chain payments and standardized cross-chain transfers, and a digital asset platform to integrate existing financial infrastructure with blockchain. PBOC Deputy Governor Lu Lei emphasized that the hub will support cross-border trade, investment, and financing while promoting connectivity between domestic and international financial networks. This move aligns with PBOC Governor Pan Gongsheng’s earlier announcement at the Lujiazui Forum in June 2025, as part of eight initiatives to advance yuan internationalization.

Complementing the center’s launch, Hong Kong-based fintech AnchorX introduced AxCNH on September 17, 2025, at the 10th Belt and Road Summit. Pegged 1:1 to the offshore Chinese yuan (CNH) and fully backed by reserves in regulated institutions, the stablecoin operates on Conflux blockchain technology and holds a license from Kazakhstan’s Astana Financial Services Authority (AFSA)—marking the first such approval in the country. Traded on Kazakhstan’s ATAIX exchange in pairs like AxCNH:KZT and AxCNH:USDT, AxCNH targets cross-border payments within China’s Belt and Road Initiative (BRI), where Kazakhstan serves as a key partner and gateway to Central Asia. AnchorX signed MoUs with partners like Zoomlion, Lenovo, and Conflux to explore applications in trade settlements, digital asset trading, and real-world asset tokenization.

Strategic Push for Yuan Internationalization

These developments reflect Beijing’s multi-pronged strategy to reduce reliance on the U.S. dollar-dominated systems like SWIFT, amid escalating geopolitical tensions and the rapid growth of dollar-pegged stablecoins, which command over 99% of the $265 billion global stablecoin market. By integrating blockchain for efficient, low-cost settlements—potentially cutting fees by up to 70% and enabling near-instant transfers—the e-CNY and AxCNH aim to streamline BRI trade, which spans over 150 countries and trillions in infrastructure investments. Conflux CTO Yang Guang described AxCNH’s launch as having a potential “butterfly effect” on reshaping cross-border payments, while PBOC officials highlight providing an “open, inclusive, and innovative Chinese solution” to global finance.

Despite China’s 2021 ban on crypto trading and mining, it has embraced state-controlled blockchain for traceability and compliance, including automated anti-money laundering via smart contracts. Recent policy signals indicate a shift toward offshore pilots in Hong Kong and beyond to bypass capital controls and promote CNH usage. Analysts note that while the yuan currently holds under 3% of global payments compared to the dollar’s near 50%, these tools could foster a multipolar monetary system.

Implications for Global Stablecoin Competition and USD Dominance

The rollout signals escalating rivalry in the stablecoin arena, where U.S. tokens like USDT and USDC dominate due to the dollar’s entrenched role in reserves and trade. Chinese economists warn that unchecked dollar stablecoin growth could solidify U.S. hegemony in the digital realm, prompting calls to align sovereign credit with global applications through e-CNY expansion and yuan-pegged tokens. AxCNH, in particular, targets BRI efficiencies, mitigating sanction risks and exchange volatility while challenging dollar reliance in emerging markets.

Challenges remain, including regulatory hurdles, trust in yuan-backed assets, and interoperability with existing systems. However, with China’s $54.5 billion blockchain investment through 2029 and pilots demonstrating cost reductions, these efforts could erode USD edges in cross-border finance. As one expert noted, without yuan presence on blockchains, China risks exclusion from a digital future increasingly shaped by stablecoins. This positions Beijing to influence a more diversified global monetary landscape, potentially reshaping power dynamics in programmable money.

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