The rapid evolution of digital finance has placed stablecoins at the center of global financial discourse. As these digital assets gain traction, their implications for monetary systems, cross-border payments, and financial stability are becoming increasingly significant. On July 1, Fudan University’s School of Economics hosted a high-level online symposium titled “Stablecoin and the Global Financial Shift,” bringing together leading economists and financial experts to analyze the current landscape and future trajectory of stablecoin development.
The event, moderated by Professor Yang Changjiang, Director of the Fudan Economic Research Center, featured in-depth discussions from scholars at Fudan University and the Shanghai Financial Development Laboratory. Their insights offer valuable perspectives on how stablecoins are reshaping the international financial order—and what strategic responses may be necessary.
Understanding Stablecoins: A New Era of Digital Payments
Stablecoins represent a pivotal innovation in digital finance—cryptocurrencies pegged to stable assets like the U.S. dollar, designed to minimize volatility while enabling fast, low-cost transactions across borders. According to Zou Chuanwei, Chief Researcher at the Shanghai Financial Development Laboratory’s Frontier Research Center, stablecoins have achieved remarkable scale: as of 2025, the total market cap approaches $260 billion, accounting for nearly 8% of all crypto assets. More strikingly, daily trading volume exceeds $150 billion—97% of all crypto trading—with 99% tied to dollar-pegged tokens like USDT and USDC.
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Zou emphasized that stablecoins are not money creators but tokenized representations of existing fiat currency. They operate through full collateral reserves and function primarily as payment tools with key features: non-duplicability, peer-to-peer transferability, and seamless cross-border circulation. However, he warned that the dominance of dollar-backed stablecoins could accelerate global dollarization, posing systemic risks and challenging national monetary sovereignty—particularly for emerging economies.
Historical Context: Where Do Stablecoins Fit in Monetary Evolution?
Professor Wang Yongqin, Executive Dean of Fudan’s Institute of Financial Studies, placed stablecoins within the broader arc of monetary history. From unbacked cryptocurrencies like Bitcoin to algorithmic stablecoins and now fiat-collateralized models, he argued that today’s dominant stablecoins resemble money market funds more than true currencies.
He highlighted a critical limitation: stablecoins fail to meet the three essential functions of money—unit of account, store of value, and medium of exchange with elasticity. Unlike central bank-issued money, they lack the ability to expand or contract credit in response to economic cycles. Their rigid supply mechanism may even exacerbate U.S. Treasury shortages, threatening global financial stability.
Moreover, Wang noted that shifting global economic power—from a unipolar U.S.-centric system toward a multipolar world with rising Asian influence—intensifies demand for safe assets. China, he suggested, should proactively develop its government bonds as globally trusted safe-haven instruments to support RMB internationalization and reduce dependency on dollar-denominated assets.
The Future of Money: From Credit Systems to Tokenization
Zeng Gang, Chief Expert at the Shanghai Financial Development Laboratory, traced the evolution from gold standard to Bretton Woods and finally to today’s fiat credit system, where central banks and commercial banks jointly create money. While this two-tier system provides flexibility, it also introduces complexity and regulatory challenges.
In this context, stablecoins emerge not as replacements but as complementary innovations that reflect changing user behaviors—especially among “digital natives” who expect instant, borderless transactions. Zeng stressed that central banks must adapt by exploring central bank digital currencies (CBDCs) and developing regulatory frameworks that balance innovation with stability.
He envisioned a future where multiple forms of money coexist—traditional fiat, CBDCs, private stablecoins—forming a pluralistic monetary ecosystem shaped by technological advancement and shifting trust dynamics.
Balancing Innovation and Sovereignty: The Role of Public-Private Collaboration
Yang Changjiang returned to the theme of balance—between public authority and private initiative, centralization and decentralization, on-chain and off-chain systems. He described stablecoins as a transitional form in the tokenization era, one that maps sovereign currencies into digital environments without replacing them.
Rather than viewing stablecoins as threats, Yang advocated for an open yet strategic approach. He proposed piloting RMB-pegged stablecoin projects in offshore financial hubs like Hong Kong and Singapore, creating real-world use cases that enhance the yuan’s global utility while maintaining regulatory oversight.
This hybrid model—leveraging private-sector efficiency under public governance—could position China at the forefront of digital financial innovation.
Advancing RMB Internationalization Through Digital Channels
Professor Zhou Guangyou, Director of Fudan’s Digital Finance Research Center, focused specifically on how stablecoins challenge—and can empower—the internationalization of the renminbi. He identified two major risks: first, dollar-dominated stablecoins capturing cross-border payment volumes; second, platform ecosystems creating network lock-in effects that marginalize non-dollar digital currencies.
To counter this, Zhou recommended a three-pronged strategy:
- Launch RMB-backed stablecoins in key international markets.
- Deepen mechanisms for digital currency cross-border clearing.
- Actively participate in shaping global stablecoin regulations to strengthen China’s voice in digital financial governance.
His vision is clear: transform the RMB from a currency passively used in trade into an actively shaped global standard in the digital age.
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Frequently Asked Questions
What are stablecoins?
Stablecoins are digital currencies designed to maintain a stable value by being pegged to reserve assets like the U.S. dollar or gold. Most operate on blockchain networks and enable fast, transparent transactions worldwide.
Are stablecoins safe?
While generally less volatile than other cryptocurrencies, stablecoins carry risks related to reserve transparency, regulatory uncertainty, and counterparty exposure. Regulatory oversight remains critical to ensure full backing and consumer protection.
Can stablecoins replace traditional money?
Not in the near term. Stablecoins currently serve mainly as transactional tools within crypto ecosystems. They lack monetary policy functionality and widespread legal tender status, limiting their role as full substitutes for national currencies.
How do stablecoins affect monetary policy?
Large-scale adoption of foreign-backed stablecoins can undermine domestic monetary control—a phenomenon known as “crypto dollarization.” This makes it harder for central banks to manage liquidity and interest rates effectively.
What is China’s strategy regarding stablecoins?
China focuses on developing its own digital currency (e-CNY) and exploring regulated RMB-pegged stablecoin pilots abroad. The goal is to promote financial innovation while safeguarding monetary sovereignty and advancing RMB internationalization.
Could RMB-pegged stablecoins become widely adopted?
Their success depends on international trust in China’s financial system, regulatory clarity, and integration with global payment networks. Strategic deployment in financial centers like Hong Kong could serve as a launchpad for broader acceptance.
Conclusion: Navigating the Digital Financial Frontier
The symposium underscored that stablecoins are more than just technological novelties—they are catalysts for rethinking how money functions in a digitized, interconnected world. As experts agreed, the rise of stablecoins reflects deeper shifts in finance: decentralization, globalization, and the growing influence of digital-native users.
For China and other nations, the challenge lies in embracing innovation without compromising financial stability or sovereignty. By building robust digital infrastructure, fostering international collaboration, and crafting forward-looking regulations, countries can harness the potential of stablecoins to build a more inclusive and resilient global financial system.
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Core keywords: stablecoin, digital finance, RMB internationalization, cross-border payments, monetary evolution, financial stability, tokenization, global financial shift