China's first offshore RMB stablecoin is launched in Kazakhstan, challenging the dominance of the US dollar.

The global financial landscape is quietly undergoing changes. On September 17, the world's first regulated offshore renminbi stablecoin AxCNH officially debuted in Kazakhstan, marking a key step for China in the blockchain technology and renminbi internationalization strategy. Behind this low-key launch of an innovative financial tool lies China's strategic intention to weaken the dominance of the US dollar in the digital money domain, as well as a grand blueprint to promote economic integration among countries along the "Belt and Road".

Renminbi stablecoin: An important piece in China's Blockchain strategy

AxCNH is launched by AnchorX, a fintech company based in Hong Kong, utilizing technology from the Conflux blockchain network supported by the Chinese government, and has obtained regulatory approval from Kazakhstan, the largest economy in Central Asia. This stablecoin is pegged to the offshore Renminbi (CNH), providing a new payment channel for cross-border trade between China and countries along the "Belt and Road".

Conflux Chief Technology Officer Yang Guang, based in Shanghai, stated during an interview that although this release is relatively low-key, it could create a "butterfly effect" and has the potential to reshape the global cross-border payment landscape. This assessment is not an exaggeration—within the cryptocurrency market dominated by USD stablecoins, the emergence of a regulated RMB stablecoin will undoubtedly bring new options and possibilities to the market.

China's Multilateral Strategy for the Internationalization of the Renminbi

The launch of AxCNH is the latest initiative in China's multi-pronged strategy to promote the internationalization of the renminbi. In recent years, China has been actively exploring various ways to enhance the international status of the renminbi, including:

· The research and pilot of Central Bank Digital Currency (e-CNY)

· Expansion of cross-border trade settlements in Renminbi

· The construction of the Renminbi International Payment System (CIPS)

· Currency swap agreements with multiple central banks

· The blockchain technology and stablecoin applications that are joining now

Tsinghua University computer scientist Yang Tao told Reuters: "With the growth of US dollar stablecoins, can you imagine a digital world in 10 or 20 years without a place for the Renminbi on the blockchain? Of course not." This perspective directly highlights the strategic necessity for China to develop a Renminbi stablecoin.

Integration of the "Belt and Road" Strategy and Blockchain Technology

The launch location of AxCNH in Kazakhstan is not a coincidence. As an important participant in the "Belt and Road" initiative and China's largest trading partner in Central Asia, Kazakhstan occupies an important position in China's geopolitical economic strategy.

Yang Tao revealed that Conflux has been commissioned by the Chinese government to create a Blockchain platform connecting countries along the "Belt and Road" initiative. This platform aims to provide efficient and low-cost cross-border payment solutions for participating countries, while also promoting the use of the Renminbi in these regions.

AnchorX stated on its official website that the newly launched Renminbi stablecoin is an economically efficient alternative for traditional financial payments, which will enhance the cross-border transaction efficiency between "Belt and Road" countries and Chinese offshore entities. This positioning clearly demonstrates the instrumental role of AxCNH in China's "Belt and Road" strategy.

Strategic Considerations to Reduce the Risk of US Sanctions

In the current complex international environment, the launch of AxCNH also has a significant strategic meaning: to reduce the risk of financial sanctions that the United States may impose.

In recent years, the United States has frequently used financial sanctions as a diplomatic tool, leveraging the core position of the dollar in the global financial system to pressure targeted countries. By developing a payment network based on Blockchain technology, China can establish a payment channel that is relatively independent of the dollar system for itself and its trade partners, thereby reducing the impact of potential sanctions.

Augustine Fan, the Insights Director of the digital asset trading platform SignalPlus, pointed out that for China, "the stablecoin project is another venue or experiment to promote the use of offshore renminbi." If this experiment is successful, it will provide China with more financial autonomy and international influence.

The Subtle Balance of China's Blockchain Policy

It is worth noting that China has adopted a "layered management" strategy in the application of blockchain technology. On one hand, since 2021, China has banned cryptocurrency trading within its borders; on the other hand, the Chinese government actively supports the research and application of blockchain technology, especially in areas such as cross-border trade.

Yang Tao stated that the issuance of offshore RMB stablecoins theoretically does not require approval from the People's Bank of China, and if used to facilitate cross-border trade, the Beijing side would support this measure. He emphasized: "As a major country, China will not miss any potentially valuable technology and will invest in various directions, including Blockchain."

This subtle balance in policy reflects China's strategic thinking on blockchain technology: it aims to prevent the financial risks that cryptocurrencies may bring while fully utilizing the innovative potential of blockchain technology in international trade and finance.

Hong Kong as a testing ground for Blockchain innovation in China

While mainland China maintains a cautious attitude towards cryptocurrencies, Hong Kong is becoming an important testing ground for blockchain innovation in China. Hong Kong has established a regulatory system for stablecoins, and although no licenses have been issued to any issuers yet, the existence of its regulatory framework provides possibilities for future development.

AnchorX, as a financial technology company headquartered in Hong Kong, is backed by Conflux and the Chinese investment firm Hony Capital, representing a typical case of China promoting blockchain financial innovation in Hong Kong. This "Hong Kong first" model may become an important pathway for China to explore blockchain financial applications.

Reshaping the Global Digital Money Landscape

The launch of AxCNH, although limited in scale, carries significant symbolic meaning. It represents an important beginning: the official entry of the Renminbi into the global Digital Money competition.

Currently, US dollar stablecoins such as USDT and USDC dominate the global cryptocurrency market, with a total market capitalization exceeding 100 billion dollars. In contrast, AxCNH is still small in scale, but it has set a precedent, paving the way for the future issuance of larger-scale renminbi stablecoins.

Augustine Fan from SignalPlus stated that this also indicates "the Chinese government may hold a positive view on the potential of Blockchain technology," while he also pointed out that regulatory agencies will adopt a cautious and prudent approach. This balanced attitude is precisely China's consistent position when advancing the application of Blockchain technology.

Future Outlook: The Vision of the Digital Silk Road

The launch of AxCNH is just the first step in China's Digital Money strategy. With the deepening of the "Belt and Road" initiative and the continuous maturity of Blockchain technology, we can foresee more Blockchain-based financial innovations unfolding between China and its partner countries.

These innovations may include:

· More countries and regions issue regulated RMB stablecoins

· Blockchain-based cross-border trade financing platform

· Exploration of interoperability with central bank digital currencies from various countries

· The coordinated development of the Digital Renminbi and the Renminbi stablecoin

If these efforts are successful, a "Digital Silk Road" based on blockchain technology and centered on the Renminbi may be formed in the future, providing efficient and low-cost financial infrastructure for countries along the "Belt and Road" while enhancing the international status of the Renminbi.