July 25, 2025
By Anjali Kochhar
In a geopolitical twist few predicted, China’s long-standing resistance to stablecoins appears to be softening in a dramatic way. According to Evan Auyang, president of Animoca Brands, the U.S.’s recent regulatory momentum, particularly through the GENIUS Act, isn’t just shaping America’s crypto future. It’s jolting Asian powerhouses like China into action. Stablecoins, once labeled a risk by Chinese authorities, are now being explored as powerful tools to strengthen the yuan’s global role, all while countering the overwhelming dominance of U.S. dollar-backed tokens like USDT and USDC in Asia.
Back in 2021, China’s central bank had raised red flags against global stablecoins such as Facebook’s Libra (now defunct Diem), calling them a threat to national monetary sovereignty, capital control, and financial security. Fast forward to 2025, the tone has shifted. Auyang reveals that Chinese regulators are now more open to yuan and Hong Kong dollar-backed stablecoins, especially if these projects are based in Hong Kong with clear legal frameworks.
This sudden openness isn’t just a policy evolution. It’s a direct reaction. Auyang credits the U.S. GENIUS Act for this push. The act, passed in 2025, offers clear and comprehensive regulations for fiat-backed stablecoins, paving the way for institutional adoption in the U.S. But its side effect is that it reinforced the dollar’s grip on the crypto economy, sending shockwaves through Asia. China, realising it could be digitally sidelined, is now racing to build its own “rails” for stablecoin usage before it’s too late.
Hong Kong is expected to become the testing ground. With a robust legal and financial system, it’s the perfect sandbox for issuing regulated CNH (offshore yuan) and HKD stablecoins. These stablecoins could operate across public blockchains, linked to onshore banking assets and effectively bridging regulated finance with decentralised infrastructure.
“Everybody’s going to do this after the U.S. passes the GENIUS Act. Every country will have a regulated stablecoin at some point,” said Auyang.
He believes tokenized stablecoins could soon rival central bank digital currencies (CBDCs), offering a more flexible, public-chain alternative to rigid state-controlled projects like the e-CNY. The goal is to regain strategic control, promote RMB internationalisation, and provide a local alternative to dollar-dominated crypto commerce.
What began as a compliance move by the U.S. might just have sparked China’s next big leap in digital currency.
About the author
Anjali Kochhar covers cryptocurrency and blockchain stories in India as well as globally. Having been in the field of media and journalism for over four years now, she has developed a sharp news sense and works hard to present information that goes beyond the obvious. She is an avid reader and loves writing on a wide range of subjects.
