China is cautiously laying out stablecoin strategies with Hong Kong as a testing ground, with Conflux and ChainMaker as potential infrastructure options.

China's financial regulatory authorities are closely monitoring the global stablecoin dynamics and recently convened encryption experts to discuss strategies that adapt to national conditions, emphasizing the need to comply with capital flow management requirements. Hong Kong, as a policy testing ground, has legislated to allow licensed institutions to issue fiat-collateralized stablecoins, initially opening licenses only to a few major state-owned banks. Regulators are concerned that the dominance of USD stablecoins may reinforce US monetary hegemony, but state-owned enterprises are showing increasing interest in stablecoin payment settlements, with several central enterprises in Hong Kong applying for licenses, and offshore RMB stablecoins are also under consideration. Industry analysis indicates that the public chain Conflux (CFX), with its compliance status and adaptability to international standards, may become the preferred underlying layer for stablecoins; while the Chang'an Chain (ChainMaker), despite receiving policy support, may have its consortium blockchain architecture limit cross-border applications.

Regulatory Tone: Dual Priorities of Compatibility with National Conditions and Prevention of Capital Outflow According to the Financial Times, Chinese financial regulators have recently summoned experts in the encryption field to discuss stablecoin strategies. The core requirement is clear:

1. National Adaptability: The stablecoin solution must align with China's specific financial environment and regulatory framework.
2. Capital Flow Control: Central bank officials have repeatedly warned about the risk of capital outflow that stablecoins may trigger. The regulatory attitude shows a cautiously open characteristic, exploring innovative possibilities under the premise of risk prevention.

Hong Kong Testing Ground: Limited Licensing System and Offshore Renminbi Options Hong Kong plays a key role as China's pioneer zone for cryptocurrency policy:

• Legislative Breakthrough: A bill has been passed allowing licensed institutions to issue fiat-backed stablecoins.
• Strict Control of Licenses: The Hong Kong Monetary Authority (HKMA) plans to issue only a very limited number of licenses starting next year, with the first batch including only one of the four major state-owned banks.
• Offshore Renminbi Exploration: Regulators have not ruled out the possibility of approving offshore Renminbi collateralized stablecoins. Multiple state-owned enterprises operating in Hong Kong are actively applying for stablecoin licenses.

Policy Dilemma: Concerns Over Dollar Hegemony and Demand for State-Owned Enterprises' Applications Coexist Pan Gongsheng, the governor of the People's Bank of China, acknowledged that stablecoins are reshaping the traditional payment landscape, but there is a core contradiction at the policy level:

• Worry about US hegemony: US dollar stablecoins may further consolidate America's dominance in global currency.
• Demand from State-Owned Enterprises Rising: State-owned enterprises show a significant increase in interest in the application of stablecoins in cross-border payments and trade settlement scenarios.

Infrastructure Competition: The Path Divergence between Conflux and Chang'an Chain If China's stablecoin is implemented, the underlying blockchain infrastructure will be key. PANews analyst "Frank" theorizes two major technical routes:

1. Conflux (Tree Graph) Public Blockchain Path:
   • As the only regulated public chain in China, the native token CFX has significant Compliance advantages.
   • Strong compatibility with international standards, most aligned with the positioning of cross-border stablecoin infrastructure
2. Chang'an Chain (ChainMaker) Consortium Blockchain Path:
   • Strongly supported by Beijing's policies, it has been adopted by numerous central enterprises and included in government plans.
   • Enterprise-level architecture meets domestic needs, but the characteristics of Consortium Blockchain limit international scenario expansion.
3. BSN/Fire Chain Network: Adopts a permissioned blockchain with no token design, focusing on serving industry needs, but the technical architecture has relatively weak compatibility with stablecoins.

Conclusion: Hong Kong pilot leads the way, infrastructure determines success or failure China is cautiously advancing its stablecoin strategy under the "One Country, Two Systems" framework with Hong Kong as an innovation sandbox. Regulators are seeking a balance between capital account openness and currency sovereignty protection, with offshore Renminbi stablecoins potentially becoming a key to breakthrough. The choice of underlying infrastructure will determine the development path — Conflux has the advantage with its compliant public blockchain attributes, while Chang'an Chain relies on policy resources to deepen its domestic ecosystem. As Hong Kong licenses are gradually issued, the dual-track system of China’s stablecoins, characterized by "domestic control and offshore experimentation," is becoming increasingly clear.