The Chinese stablecoin market has officially entered the global stage with the debut of AxCNH, a fiat-backed token pegged to the offshore Chinese yuan (CNH). Developed by AnchorX, AxCNH is designed to boost cross-border trade and strengthen China’s presence in the international blockchain payment ecosystem. As competition intensifies, the question arises: Can AxCNH reshape the global stablecoin market?
The Rise of CNH Stablecoin
Stablecoins have long been dominated by the U.S. dollar, with Tether (USDT) and USD Coin (USDC) accounting for over 90% of global circulation. The launch of AxCNH marks the first major attempt by China to challenge dollar dominance in the blockchain space. By offering a CNH stablecoin, China aims to expand the yuan’s influence across the Belt and Road Initiative (BRI) and beyond.
Why CNH and Not CNY?
- CNH is the offshore yuan, primarily used in global trade and foreign markets.
- CNY is the onshore yuan, restricted by China’s domestic financial regulations.
AxCNH leverages CNH because it offers greater flexibility for cross-border transactions, avoiding strict capital controls while providing global accessibility.
Technical Foundation: Overcollateralization
AnchorX ensures that every AxCNH token is overcollateralized. This means reserves exceed the number of tokens in circulation, providing a buffer against volatility and liquidity crises.
Benefits of Overcollateralization:
- Stronger trust from institutional investors
- Greater protection during market volatility
- Transparency in reserve management
| Feature | AxCNH | USDT | USDC |
|---|---|---|---|
| Peg | CNH | USD | USD |
| Collateral | Overcollateralized | Fiat/Commercial Paper (mixed) | Fiat-backed |
| Target Market | Cross-border trade, BRI | Global | Global |
South Korea Joins the Race with KRW1
Interestingly, China is not alone. Around the same time, South Korea launched KRW1, a stablecoin pegged to the Korean won (KRW). Both projects highlight Asia’s ambition to challenge dollar-backed stablecoins.
Key Comparisons
- AxCNH: Targets BRI nations and global trade corridors
- KRW1: Focused on domestic adoption and regional expansion
This dual development signals a larger Asian stablecoin movement, diversifying beyond dollar-centric digital assets.
On-Chain and Market Analysis
Stablecoin Market Landscape
- Total Market Cap (2025): $160+ billion
- USDT Dominance: ~70%
- USDC Share: ~20%
- Other Fiat-Backed Stablecoins: Less than 10%
If AxCNH captures even 2-3% of the market, it could account for $3–5 billion in circulation, making it the largest non-USD stablecoin.
On-Chain Activity Insights
- Liquidity Pools: Early AxCNH liquidity has formed on Ethereum and Solana.
- Transaction Volumes: Initial daily transactions have surpassed $50 million.
- User Base: Primarily concentrated in Hong Kong, Singapore, and BRI nations.
These metrics suggest strong institutional interest, especially from companies operating in cross-border supply chains.
Potential Benefits and Risks
Benefits of AxCNH
- Diversification: Reduces global reliance on dollar-pegged stablecoins.
- Trade Facilitation: Supports seamless transactions across BRI economies.
- Financial Inclusion: Provides easier access to CNH for global users.
Risks to Consider
- Regulatory Uncertainty: China’s strict stance on crypto could pose compliance challenges.
- Liquidity Risks: Adoption depends on integration with global exchanges and DeFi protocols.
- Geopolitical Tensions: Wider use of CNH may face resistance in Western markets.
The Bigger Picture: Geopolitics of Stablecoins
The rise of AxCNH is not just about finance; it’s about geopolitical influence. As stablecoins move beyond being financial tools to strategic assets, nations are racing to launch their own fiat-backed digital tokens. China’s AxCNH could set the stage for more national stablecoins in the near future.
Conclusion
The launch of AxCNH represents a pivotal moment in the stablecoin sector. By introducing the first Chinese stablecoin pegged to CNH, AnchorX is positioning China as a major player in the blockchain-powered global financial system. Whether AxCNH succeeds in challenging U.S. dollar dominance depends on regulatory clarity, adoption rates, and global market trust.
This article is for informational purposes only and does not constitute financial advice.
