The deputy director of China’s National Laboratory of Finance and Development reportedly says that the country should expand the scope of its digital yuan amid President Trump’s embrace of cryptocurrencies. 

In an opinion piece posted on the official Chinese publication the Study Times, Zhang Ming says that stablecoins anchored to the US dollar dominate the digital currency space and will further strengthen the currency’s global monetary status.

“Once the US dollar stablecoin links the international credit of the US dollar more closely with the application scenario of the virtual world, it may greatly consolidate the hegemony of the US dollar.”

Last week, President Trump said that dollar-backed stablecoins will help maintain the US dollar as the top fiat currency in the world. He also called on Congress to pass legislation involving stablecoins and market structure.

To counter Trump’s moves to cement the US dollar’s supremacy, Zhang urges his nation to scale up the coverage of its digital yuan in terms of assets and reach.

“Expand the substitution range of digital RMB (renminbi) from M0 (cash) to M1 (cash plus demand deposit) or even M2 (cash plus all deposits) as soon as possible. Only by upgrading the substitution scope of digital RMB from M0 to M1 or even M2 can we comprehensively expand the application scenario of digital RMB, promote the domestic and foreign use of digital RMB and help the internationalization of RMB.”

He says another planned initiative is to ramp up the development of Chinese stablecoins.

“Expand the use of digital tokens on the internet platform and better combine the sovereign credit of RMB with the global application scenario of the Chinese platform. As long as the design and risk prevention are appropriate, expanding the use of digital tokens on these platforms can significantly expand the international monetary status of the RMB so as to meet the challenges of the US dollar stablecoin more calmly.”

According to Zhang Ming, China and other countries should issue their own fiat-backed crypto to keep the US from dominating the stablecoin and digital asset markets.

“The flourishing of various digital currencies is naturally better than the US dollar monopolizing the development track of digital currencies.”

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The following is a guest post from Maksym Sakharov, Co-Founder & Group CEO of WeFi.

The current markets are experiencing tailwinds due to the tariffs imposed by the U.S. administration and retaliatory measures from trading partners. So far, however, the market proponents are saying that Trump’s tariffs are primarily a negotiation strategy, and their effect on businesses and consumers will remain manageable.

Market uncertainty drives institutional interest 

Adding to uncertainty are the inflationary pressures that could challenge the Federal Reserve’s rate-cutting outlook as inflation is still stuck above the Fed’s 2% target. Besides that, an impending fiscal debate in Washington over the federal budget is also causing jitters in the market. 

Resolving the debt ceiling remains a pressing issue, as the Treasury is currently relying on “extraordinary measures” to meet U.S. financial obligations. The exact timeline for when these measures will be exhausted is unclear, but analysts anticipate they may run out after the first quarter. 

While the administration has proposed eliminating the debt ceiling, this could face resistance from fiscal conservatives in Congress. Despite these macroeconomic uncertainty, one sector that is experiencing steady growth is stablecoins, according to a recent report. Much of the volume is driven by flows in USDT and USDC. 

Dollar-pegged stablecoins dominate the market 

Stablecoins started as an experiment – a programmable digital currency that would make it easier for users to enter the crypto market and trade different digital assets. A decade later, they are a critical part of the wider digital financial infrastructure.

At present, the stablecoin market cap stands at a record $226 billion and continues to expand. Demand in emerging markets drives this growth. According to a recent Ark Invest report, Dollar-pegged stablecoins are dominating the market. They account for over 98% of the stablecoin supply, with Gold and Euro-backed stablecoins only sharing a small portion of the market.

In addition to this, Tether’s USDT accounts for over 60% of the total market. ARK’s research suggests that the market will expand and include Asian currency-backed stablecoins.

Besides that, digital assets  are going through a shift marked by “stablecoinization” and “dollarization.” Asian nations like China and Japan have offloaded record amounts of US Treasuries. Saudi Arabia has ended its 45-year petrodollar agreement, and BRICS nations are increasingly bypassing the SWIFT network to reduce reliance on the US dollar. 

Traditionally, Bitcoin and Ether served as the primary entry points into the digital asset ecosystem. However, over the past two years, stablecoins have taken the lead, now representing 35% to 50% of on-chain transaction volumes.

Emerging markets bet big on stablecoins

Despite global regulatory headwinds, emerging markets have been adopting stablecoins. In Brazil, 90% of crypto transactions are done via stablecoins, primarily used for international purchases.

A Visa report ranks Nigeria, India, Indonesia, Turkey, and Brazil as the most active stablecoin markets, and Argentina ranks second in stablecoin holdings. Additionally, 6 out of every 10 purchases in the country were made using stablecoins pegged to the dollar, with near parity between USDC and USDT.

This shift towards stablecoins in Argentina is driven by high inflation and the need to protect against the devaluation of the Argentine Peso. Clearly, in countries with unstable currencies, people turn to stablecoins such as USDT to safeguard their wealth. 

In addition to making cross-border transactions easier, this adoption offers a hedge against local currency volatility. This signals a serious challenge to outdated financial systems.

The future of stablecoins

Analysts predict that the 2025 stablecoin boom will push market capitalization to $400 billion or more. Projections suggest that stablecoins could reach a market cap of $3 trillion over the next five years. Most importantly, financial institutions are joining this trend. Stripe recently completed a $1 billion acquisition of Bridge, a startup that builds stablecoin infrastructure. 

Traditional banks such as BBVA plan to launch their own stablecoins by the end of 2025. Federal Reserve Governor Christopher Waller described stablecoins as an important innovation. He stated that digital currencies can cut reliance on payment intermediaries, lower global costs, and improve efficiency. 

Last year, commerce nominee Howard Lutnick said stablecoins help support the dollar. Major Wall Street players like Bank of America, BlackRock, BNY Mellon, CBOE, Charles Schwab, and Citi are investing in the sector. Their participation signals that stablecoins are set to transform global payments.

The trend is clear: stablecoins are no longer a crypto experiment — they are becoming a core part of financial infrastructure in emerging markets to move money globally. As adoption accelerates, the question is not if stablecoins will transform payments but how quickly they will stand alongside — or even replace — outdated financial systems.

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