How the offshore RMB stablecoin experiment in Hong Kong breaks the deadlock

The Hong Kong “Stablecoin Regulation” officially came into effect on May 30. Prior to that, on May 20, the United States passed the “Guiding and Establishing the American Stablecoin National Innovation Act” (GENIUS Act). The arrival of these two is not a coincidence; behind them lies the reshaping of rules and strategic first movers under the international competition of Digital Money.

In response to the trend of global digital asset regulation evolving from disorder to structured rules, Hong Kong has swiftly responded by establishing a legal closed loop in a regulatory vacuum, which may signal the impending experiment of offshore Renminbi (CNH) stablecoin — the digital path for the internationalization of the Renminbi is becoming increasingly clear and feasible.

The CNH stablecoin has not yet been launched, but the effectiveness of the “Stablecoin Regulations” has opened up a space for institutional imagination. If Hong Kong takes the lead in piloting the CNH stablecoin, it may open up a new digital path for the internationalization of the Renminbi and become a key support point for the reconstruction of future cross-border payment systems.

Whether it is a historical reflection, a breakthrough in the system, or the realistic demand for the internationalization and digital upgrade of the Renminbi, the reshaping effect of stablecoins in cross-border payments can no longer be ignored. As a modern monetary tool that integrates currency attributes and international payment functions, stablecoins are not only an indispensable infrastructure in the digital economy era but may even become a tool for rules-based games.

Do you remember the pilot project for personal Renminbi business launched in Hong Kong in 2003?

It was that pilot program that laid the institutional foundation for RMB cross-border trade settlement in 2009. Today, Hong Kong once again stands at the watershed of RMB internationalization. The CNH stablecoin may become the next breakthrough in digital finance, ushering in the 2.0 era of the ‘Hong Kong experience’.

The core experience of the successful pilot back then was the “regulatory closed loop + market transmission” mechanism: the mainland used Bank of China Hong Kong as a clearing hub to transmit regulatory requirements to the Hong Kong banking system in the form of commercial agreements, which both respected market autonomy and ensured system security. This layered regulatory framework may provide a practical reference for today’s stablecoin experiments.

Currently, the “stablecoin regulation” has reserved policy space for the inclusion of non-HKD fiat currencies such as RMB as anchor currencies through flexible provisions, but specific implementation requires case-by-case approval from the Monetary Authority, and currently only HKD stablecoin issuance is subject to mandatory regulation. Hong Kong is exploring the integration of RTGS (real-time gross settlement) systems with on-chain clearing, and its “regulatory sandbox + tiered openness” model solidifies the advantages of Digital Money innovation through controlled trial and error.

If the CNH stablecoin is viewed as a systemic entry point for the internationalization of the Renminbi, it not only has the potential to complement CIPS (Cross-border Interbank Payment System for Renminbi), but also hopes to establish a Renminbi channel independent of the SWIFT (Society for Worldwide Interbank Financial Telecommunication) system. In the technological race of global payment networks, Hong Kong is attempting to create a digital “outlet” for the Renminbi.

This direction has been confirmed by policy signals. On May 19, Pan Gongsheng, the Governor of the People’s Bank of China, stated at a forum on financial support for the real economy: “Orderly advancement of the international use of the Renminbi, enhancing the facilitation level of trade and investment financing.” This latest statement regarding the internationalization of the Renminbi may reflect further refinement of policy direction, emphasizing the practical application of the Renminbi in specific scenarios.

Currently, the internationalization of the Renminbi faces challenges such as insufficient cross-border payment efficiency and fragmented offshore market liquidity, while stablecoins are expected to provide solutions. For example, efficiency leap—settlement costs can be reduced to 1/10 of traditional systems, and transaction times can be shortened from T+1 to real-time, especially suitable for small and medium-sized trade under the “Belt and Road” initiative; for example, liquidity optimization—through smart contracts, automatic redemption can enhance the utilization rate of 1.2 trillion yuan offshore RMB liquidity pool; and for example, geopolitical evasion capability—stablecoins do not rely on SWIFT and are expected to build new clearing infrastructure outside the dollar financial network.

Referring to the experience of the RMB business pilot program in 2003, the implementation of the CNH stablecoin can be advanced in three phases:

First, the sandbox trial (2025-2026): Chinese licensed institutions will issue CNH stablecoins on a pilot basis for use in the Greater Bay Area trade scenario; Second, regional expansion (2026-2027): access to cross-border projects such as mBridge (multilateral central bank digital currency bridge), covering regional settlements such as RCEP (Regional Comprehensive Economic Partnership), and pilot RWA (real-world asset) applications such as bond tokenization; Third, global promotion (from 2028 onwards): Cooperate with international organizations such as the International Monetary Fund (IMF) to develop technical and regulatory standards to promote the CNH stablecoin as a regional commodity pricing tool.

22 years ago, Hong Kong opened a “test field” for the cross-border circulation of Renminbi; today, can it once again take the lead in the major changes of Digital Money? The answer depends on two aspects: first, whether it can successfully replicate the collaborative mechanism of “regulatory penetration + market selection”; second, whether it can seize the strategic window for reshaping rules and building financial infrastructure.

If successful, the CNH stablecoin will not only be a new channel for the internationalization of the Renminbi, but it may also become a digital paradigm of China’s institutional opening. It is both a digital bridge for the Renminbi’s move towards internationalization and a key step for China to seize the initiative in the reconstruction of the global monetary order.

From individual RMB accounts to smart contract stablecoins, Hong Kong is changing, the world is changing, and the path of RMB internationalization is also evolving accordingly. What remains unchanged is the logic of institutional openness: promoting “soft connectivity” through rule alignment and activating “strategic initiative” through technological experimentation. Hong Kong is starting with the “Stablecoin Regulation” and is trying to provide a Chinese-style answer in this major test of digital finance.