Conflux Unveils Yuan Stablecoin Plan with Major Network Upgrade

Chinese Layer 1 blockchain Conflux teams up to launch an offshore yuan stablecoin and boosts performance with its upcoming 3.0 upgrade.

In a bold move toward globalizing China’s digital finance ambitions, Conflux Network has announced a dual initiative to launch a yuan-backed stablecoin for international use and release a significant network upgrade. The announcement was made during a fintech conference in Shanghai and later published on the city’s official government portal, signaling strong institutional support.

As geopolitical and financial dynamics shift, China appears to be laying the foundation for an alternative digital payment ecosystem, aiming to rival U.S. dollar dominance in the stablecoin space. Conflux’s strategy, anchored in blockchain innovation and regional cooperation, reflects a broader push to internationalize the yuan without triggering capital outflows or regulatory backlash.

Offshore Yuan Stablecoin Targets Belt and Road Integration

Conflux is collaborating with fintech firm AnchorX and Shenzhen-listed Eastcompeace Technology to develop a stablecoin pegged to the offshore yuan (CNH). The project is aimed at facilitating cross-border transactions among countries aligned with China’s Belt and Road Initiative (BRI) — a global infrastructure strategy spanning Southeast Asia, Central Asia, and parts of Europe.

Early target markets include Singapore, Indonesia, Malaysia, and Kazakhstan, reflecting Conflux’s intent to build a regulatory-compliant but globally operable payment infrastructure outside of mainland China’s strict capital controls.

The stablecoin, provisionally titled AxCNH, is backed by the offshore version of the Chinese yuan rather than the onshore RMB, aligning with China’s cautious stance on currency internationalization.

The initiative resonates with recent comments from People’s Bank of China Governor Pan Gongsheng, who noted in June that digital currencies and stablecoins are reshaping the global payments landscape.

Conflux 3.0 Upgrade Promises High-Speed Blockchain Infrastructure

In parallel with its stablecoin efforts, Conflux is preparing to roll out Conflux 3.0, a major protocol upgrade scheduled for release in August. The update will reportedly enable processing speeds of up to 15,000 transactions per second (TPS) — a sharp leap aimed at supporting real-world asset settlement and cross-border commerce.

The market responded positively to the announcement. Conflux’s native token, CFX, surged by approximately 60%, reaching $0.225 and pushing its market capitalization to $1.1 billion within 24 hours. Meanwhile, Eastcompeace Technology’s stock rose 10% on the Shenzhen exchange, hitting its daily trading limit.

This infrastructure boost is designed to support the throughput needed for stablecoin-driven trade, digital payments, and tokenized asset exchanges, especially in the context of multi-country commerce under the BRI framework.

Political and Regulatory Momentum Behind Yuan Stablecoins

The push for a yuan-backed stablecoin isn’t emerging in a vacuum. Former Chinese Deputy Finance Minister Zhu Guangyao recently argued for incorporating yuan stablecoins into China’s top-level financial policy. Speaking at a closed-door policy seminar, Zhu warned that U.S. dollar stablecoins have become a strategic extension of American financial influence.

“U.S. dollar stablecoins are the third phase of the Bretton Woods system,” Zhu stated, referencing their growing global usage and the legislative momentum behind them in Washington.

He pointed to stablecoin transaction volumes surpassing Visa and Mastercard in 2024, reinforcing the urgency for China to build its own digital currency infrastructure. Zhu specifically cited the Lummis–Gillibrand Act, a key U.S. legislative effort to regulate stablecoins and digital assets, as a move to consolidate dollar hegemony through legal channels. This comes amid broader U.S. efforts to establish regulatory clarity in the sector — as reported earlier, President Trump recently signed the GENIUS Act into law, creating a federal framework for stablecoins and signaling mainstream acceptance of digital payments.

Zhu recommended that China leverage Hong Kong as a regulatory sandbox for both offshore and domestic yuan-backed stablecoins, allowing experimentation in a relatively liberal financial environment. He emphasized that such a move could support currency internationalization without triggering systemic risks associated with capital account liberalization.

Hong Kong’s Stablecoin Licensing Regime Adds Regional Legitimacy

Adding to the regulatory momentum, Hong Kong’s new stablecoin licensing framework will come into effect on August 1, offering a formal path for issuers looking to operate within Chinese jurisdiction — albeit with some autonomy. This is expected to attract major players from the mainland, including Ant Group and JD.com, both of which are reportedly seeking approval to issue yuan-based stablecoins abroad.

Hong Kong’s approach could serve as a bridge between mainland China’s cautious stance and the more aggressive stablecoin issuance policies seen in the West. This dual-track strategy may allow Chinese firms to engage in global digital finance without violating domestic currency control policies.

Strategic Implications for the Digital Yuan and Global Finance

China’s central government has historically promoted its Digital Currency Electronic Payment (DCEP) system — often dubbed the digital yuan — as a state-controlled digital currency. However, the Conflux-led stablecoin appears to offer a complementary, more flexible tool for cross-border and commercial use cases, particularly where government-issued CBDCs may face friction.

By anchoring this initiative in the offshore yuan, the Conflux-AxCNH effort sidesteps the regulatory and political hurdles of direct onshore currency conversion, while still extending yuan-based financial influence globally.

As global competition in digital currencies intensifies, China’s evolving approach — which combines private-sector blockchain innovation, strategic regulation, and political backing — could set the tone for a multipolar financial future less dependent on the U.S. dollar.

With Conflux at the helm, China’s digital currency ambitions may soon take tangible form beyond its borders — not through state mandates alone, but through infrastructure built for speed, scale, and sovereign alignment.