Chief Economist of Galaxy Securities: Layout of stablecoins is a proactive measure for RMB to cope with the digital suppression of the US dollar.

On June 26, Zhang Jun, Managing Director, Chief Economist, and Dean of the Research Institute at China Galaxy Securities, published an article stating that although the hegemony of the US dollar in the real monetary system is still difficult to shake, the rule restructuring in the blockchain field provides the possibility for “competitive exchange” of currencies among countries. The evolution from bartering to credit currency indicates that stablecoins may drive a new leap in the “digitization of fiat currency.” Especially as the tokenization of real-world assets (RWA) is put on the agenda, stablecoins issued by different collateral and different credit entities will build a more complex financial ecosystem and accelerate the value connection between physical and digital assets. Hong Kong, China, has taken the lead in launching stablecoin regulations and initiating pilots, sending positive signals. For the Renminbi, laying out stablecoins is not only a proactive measure to respond to the digital suppression of the US dollar but also an inevitable choice in the construction of an on-chain financial system in the process of globalization. Under the traditional monetary pattern, blockchain technology provides the possibility for the internationalization of the Renminbi to “overtake on a curve” — by expanding the usage scenarios of stablecoins and embedding them into the global payment network, it is expected to reshape the international currency competition pattern amidst a century of change. It is important to be vigilant about the risks associated with stablecoins, such as technical vulnerabilities (like smart contracts), collateral management (such as the fluctuation of anchor assets), and regulatory arbitrage. However, historical experience shows that financial innovation often comes with risk games; only by fostering development under a sound regulatory framework and enhancing technical security can stablecoins transition from “barbaric growth” to “orderly evolution,” injecting innovative vitality into the global financial system.