China targets global reserve currency status but capital controls push traders toward USDT and Bitcoin
Despite China's efforts to promote the renminbi, capital controls are driving traders toward dollar stablecoins like USDT and Bitcoin as alternative settlement tools.Summary
China aims for the renminbi (RMB) to become a global reserve currency, but its capital controls prevent it from achieving this, as evidenced by the RMB's declining share of global foreign exchange reserves, which stood at only 1.93% in Q3 2025. While China expands payment infrastructure like CIPS and the mBridge CBDC platform, central banks are hesitant to accumulate RMB assets due to convertibility restrictions. This creates a vacuum filled by dollar-denominated stablecoins, such as USDT, which function as permissionless, 24/7 offshore dollar wrappers. Chinese exporters increasingly use USDT to bypass capital controls, and stablecoin cross-border flows are substantial. The persistence of these restrictions means that dollar stablecoins and Bitcoin benefit as the default workarounds, reinforcing dollar dominance outside traditional banking systems, while Bitcoin serves as a hedge against both US and Chinese financial controls.
(Source：CryptoSlate)