Ex-Bank of China Official Warns USD Stablecoins Threaten China’s Digital Yuan and Global Payment Influence

Wang Yongli, the former Vice President of Bank of China, has issued a warning about the surging dominance of US dollar-backed stablecoins such as USDT and USDC. These stablecoins now account for more than 99% of all fiat-backed stablecoins, with transaction volumes exceeding $27 trillion last year—surpassing leading payment networks like Visa and Mastercard. Wang notes this trend gives the US dollar significant leverage in digital finance, reinforcing its dominance in global payments and challenging China’s push to internationalize the yuan and expand the digital yuan (e-CNY). He urges Chinese policymakers to accelerate the development of the digital yuan and consider launching offshore yuan stablecoins in Hong Kong to better support global CNY payments and counter USD stablecoin influence. Recent regulatory moves in the US and Hong Kong, including stablecoin licensing and new digital asset frameworks, further solidify the dollar’s position. Wang also advocates for integrating digital identity systems with digital currency infrastructure to enhance China’s competitiveness. While crypto trading and private tokens remain restricted in mainland China, Wang suggests selective enterprise-level applications and the potential participation of e-CNY in multi-CBDC (central bank digital currency) cross-border settlement networks. As USD stablecoins expand rapidly, China faces a strategic policy challenge in maintaining its relevance and influence in the evolving landscape of international digital payments. Crypto traders should monitor regulatory shifts and stablecoin trends in both the US and China, as they may directly affect liquidity, demand, and global flows related to CNY, USD, and leading stablecoins.