China Unveils First CNH Stablecoin — What It Means for Global Crypto Race
The global stablecoin race gained speed this week. China and South Korea both launched regulated tokens tied to their national currencies.
Quick overview
- China and South Korea launched new regulated stablecoins, AxCNH and KRW1, respectively, to compete with dollar-pegged digital tokens.
- AxCNH is pegged to the offshore Chinese yuan and aims to facilitate trade payments among Belt and Road Initiative economies.
- Both stablecoins are overcollateralized, providing more security compared to algorithmic models that have previously failed.
- The introduction of these stablecoins highlights the growing importance of digital currencies in global financial strategies and competition.
The global stablecoin race gained speed this week. China and South Korea both launched regulated tokens tied to their national currencies. The moves show how governments are pushing to compete with dollar-pegged digital tokens.
New Stablecoins From Asia
On Wednesday, financial technology firm AnchorX introduced AxCNH, the first stablecoin pegged to the offshore Chinese yuan (CNH). The launch took place at the Belt and Road Summit in Hong Kong. It followed a regulatory change in China that now allows stablecoins for overseas markets.
AxCNH: World's First Licensed Offshore Chinese Yuan-Pegged Stablecoin Debuts at the 10th Belt and Road Summit https://t.co/ny34JMOmdu
— AnchorX (@AnchorX_Ltd) September 18, 2025
The token is designed to support payments between Belt and Road Initiative (BRI) economies. The BRI is China’s flagship trade project linking Asia, the Middle East, and Europe through land and sea routes. Hence, the AxCNH coin is expected to make trade payments faster and cheaper across these regions.
On Thursday, South Korea’s BDACS announced KRW1, a stablecoin tied to the won. Both AxCNH and KRW1 are overcollateralized. This means they are backed one-to-one by fiat currency deposits or government debt instruments held with custodians. Furthermore, this setup offers more assurance than algorithmic or undercollateralized models, which have failed in the past.
Avalanche is powering a new chapter in Korea’s digital economy. 🔺🇰🇷
BDACS, together with Woori Bank, has launched KRW1, a fully collateralized, won-backed stablecoin. Currently in a pilot phase following a full PoC, KRW1 marks an important step toward regulated, bank-integrated… pic.twitter.com/fSsH4si5zP
— Avalanche🔺 (@avax) September 18, 2025
Why Stablecoins Matter for Governments
Stablecoins are no longer just trading tools. They are now instruments of geo-strategic importance. By placing currencies on blockchain rails, governments can raise international demand for their money. Moreover, they can reduce inflationary pressures caused by excess printing while also making settlements quicker and cheaper.
The traditional financial system remains limited by restricted hours, costly cross-border transfers, and currency controls. Stablecoins, instead, operate nonstop and settle instantly. Since they are accessible through mobile phones and wallets, they widen access to fiat currencies worldwide.
China’s decision to allow an offshore CNH stablecoin highlights its effort to expand the yuan’s global role. Similarly, South Korea’s KRW1 aligns with Seoul’s goal to modernize its payment systems and increase demand for its currency in a competitive region.
Private issuers like Tether and Circle have already shown how stablecoins influence debt markets. These companies back tokens with cash and government securities. As a result, users indirectly become bond buyers. This boosts demand for sovereign debt, lowers yields, and eases governments’ debt burdens.
Tether is now one of the world’s largest holders of U.S. Treasury bills. It has surpassed developed countries including Canada, Norway, and Germany. This trend is vital as governments face rising fiscal pressures. The U.S. national debt has already climbed above $37 trillion. Hence, stablecoins are becoming part of strategies to handle growing deficits.
Anton Kobyakov, an advisor to Russian President Vladimir Putin, recently said Washington is turning to stablecoins and gold to maintain trust in the dollar as debt grows. His comments underline the role these tokens now play in global financial strategy.
Global Contest Ahead
The launches of AxCNH and KRW1 now place Asian currencies alongside the U.S. dollar and the euro in the digital currency contest. The U.S. has already passed the GENIUS Act for dollar-pegged tokens. The European Union also rolled out MiCA rules earlier this year. Therefore, the competition for digital trade dominance is expanding across regions.
For investors, the rise of Asia-backed stablecoins may reshape liquidity pools, foreign exchange markets, and global bond demand. The coming months will show whether adoption spreads across Belt and Road economies and beyond. If so, these launches may mark the beginning of a broader shift in international finance.
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