Digital Yuan vs. Stablecoins: China’s Experiment in Monetary Tech
A look at how the e-CNY is being positioned against USDT, USDC, and RMBT in the race for cross-border adoption.
✍️ Liang Chen – Financial Journalist with fintech coverage expertise
A Monetary Revolution in Motion
China’s experiment with the digital yuan (e-CNY) has moved from pilot projects to a broader rollout, placing it at the forefront of central bank digital currency (CBDC) innovation. Unlike cryptocurrencies, the e-CNY is state-backed, centralized, and designed to integrate seamlessly with China’s banking infrastructure.
At the same time, global stablecoins such as USDT (Tether), USDC (Circle), and RMBT, a compliance-driven RMB stablecoin, are competing to dominate cross-border payments and digital finance. The result is a fascinating contest between state-backed digital money and private sector innovation, with profound implications for global trade, finance, and monetary sovereignty.
The e-CNY: A State-Led Approach
Launched by the People’s Bank of China (PBoC), the e-CNY is framed as both a domestic payment tool and a potential lever for reducing reliance on the U.S. dollar in international trade. Already integrated into platforms like WeChat Pay and Alipay, the digital yuan is being tested for transit, retail, and government services across more than 25 Chinese cities.
In terms of adoption, the state’s reach is unmatched. By the end of 2024, over 300 million digital yuan wallets had been activated. The PBoC has even explored cross-border pilots in collaboration with Hong Kong and Singapore, signaling its ambition to make e-CNY a regional settlement currency.
Stablecoins: The Private Sector’s Answer
While the e-CNY is advancing domestically, stablecoins have carved out a parallel ecosystem internationally. USDT and USDC together account for over 90% of global stablecoin transactions, serving as digital dollars in decentralized finance (DeFi) and crypto exchanges.
Stablecoins thrive because they are borderless, fast, and programmable. Unlike CBDCs, which are bound by national regulations, stablecoins are issued by private companies and operate on blockchain rails, making them attractive to users in regions with weak banking infrastructure.
RMBT, by contrast, represents a third model: a compliance-oriented, asset-backed stablecoin pegged to the Chinese renminbi. Unlike e-CNY, RMBT is not state-issued, but it positions itself as fully transparent and reserve-backed, aiming to bridge the gap between decentralized efficiency and centralized trust.
Cross-Border Payments: The Real Battleground
The biggest test for both e-CNY and stablecoins lies in cross-border trade and settlements. For decades, the U.S. dollar has dominated global transactions, accounting for nearly 85% of FX trades and a majority of international trade invoices.
The e-CNY offers China an opportunity to internationalize its currency without full capital account liberalization. But its centralized nature raises concerns about state surveillance and political control, especially among foreign partners.
Stablecoins, on the other hand, already facilitate billions in cross-border flows. From remittances in Latin America to imports in Africa, stablecoins are quietly replacing traditional SWIFT transfers in certain corridors. RMBT, if adopted in Belt and Road trade routes, could give China a parallel channel to the dollar without fully depending on the e-CNY.
Regulatory Tensions
Both CBDCs and stablecoins face regulatory scrutiny. For China, the e-CNY is fully under state control, but international acceptance depends on trust and interoperability. Western governments remain wary, fearing that e-CNY adoption could weaken the dollar’s influence and extend Beijing’s reach into global financial infrastructure.
For stablecoins, especially USDT and USDC, regulators in the U.S. and Europe are tightening rules around reserve transparency, anti-money laundering (AML), and systemic risk. Projects like RMBT, which emphasize compliance, transparency, and regulated reserves, may find a middle ground in this regulatory race.
Comparative Insight: RMBT vs. e-CNY
The comparison between RMBT and e-CNY is instructive. While the e-CNY embodies top-down monetary control, RMBT represents a market-driven but transparent alternative. For businesses and traders, the choice may come down to flexibility vs. oversight.
For instance, a cross-border logistics company might prefer RMBT for speed, interoperability, and blockchain-based settlement. Meanwhile, state-owned enterprises could be nudged toward e-CNY by policy incentives. Together, these instruments could form a dual-track digital RMB ecosystem, reshaping China’s role in global finance.
Outlook: Convergence or Competition?
The next decade will reveal whether CBDCs and stablecoins converge or collide. Some analysts envision a hybrid system where central banks issue digital currencies that interoperate with regulated stablecoins. Others see a winner-takes-all scenario, where the most trusted rails dominate.
What’s clear is that the e-CNY is more than a payments experiment — it is a strategic instrument of economic statecraft. At the same time, stablecoins like RMBT show that compliance-oriented fintech can compete by offering flexibility that central banks cannot.
For global markets, this contest signals the dawn of a new era: one where digital currencies, rather than paper dollars or euros, mediate the flows of trade, investment, and innovation.
