First Chinese Yuan Stablecoin Launches as Global Currency Race Intensifies

The global contest to digitize money just escalated, with China and South Korea entering the stablecoin arena in the same week. Their launches signal a direct challenge to the dominance of U.S. dollar–pegged tokens and underscore how digital currencies are fast becoming geopolitical tools.

Financial technology firm AnchorX unveiled AxCNH, the first regulated stablecoin tied to the offshore Chinese yuan (CNH), at the Belt and Road Summit in Hong Kong on Wednesday.

Designed for cross-border payments, AxCNH is expected to streamline transactions between China and countries participating in Beijing’s trillion-dollar Belt and Road Initiative, spanning Asia, the Middle East, and Europe.

Just a day later, South Korea’s BDACS released KRW1, a won-backed stablecoin that marks Seoul’s entry into the digital currency race.

Both AxCNH and KRW1 are fully overcollateralized—backed 1:1 by fiat deposits or government debt instruments held by regulated custodians—ensuring stability and compliance.

Stablecoins as Geopolitical Weapons

The rise of yuan- and won-denominated stablecoins highlights how governments now see digital fiat as more than just financial innovation.

These tokens are becoming strategic assets—tools to boost international demand for national currencies while mitigating the inflationary impact of money printing.

Unlike traditional banking rails, stablecoins enable instant, 24/7 cross-border settlement, bypassing capital controls and costly intermediaries.

By putting fiat on blockchain rails, governments can increase global circulation of their currencies, making them more attractive in international trade and finance.

The U.S. has already enjoyed this advantage. Dollar-backed stablecoins like Tether (USDT) and Circle’s USDC dominate the market, largely by investing reserves in U.S. government debt.

This has turned millions of crypto users worldwide into indirect U.S. bondholders—boosting demand for Treasuries, lowering yields, and easing America’s $37 trillion debt burden. Tether alone now holds more U.S. Treasury bills than entire countries like Germany and Canada.

But with AxCNH and KRW1, Asia is pushing back. Analysts suggest that non-dollar stablecoins could gradually chip away at the greenback’s dominance.

Russian presidential adviser Anton Kobyakov even argued that Washington’s growing reliance on stablecoins and gold reflects a bid to preserve faith in a weakening dollar.

A Turning Point in Global Payments

The launches of AxCNH and KRW1 aren’t just national experiments—they are signals that the stablecoin race is going multipolar.

By giving digital form to their currencies, China and South Korea are laying the groundwork for faster, cheaper, and more accessible payments across borders, while also reshaping the balance of financial power.

The arrival of yuan- and won-backed stablecoins could be the start of a seismic shift in global finance.

If adoption spreads beyond crypto circles into mainstream commerce and trade, these tokens may not only rival the U.S. dollar’s grip on digital payments but also redefine how governments wield monetary policy in a blockchain-powered economy.