The Big Picture
The world is living through a tectonic shift in digital finance. Block-chains are no longer “parallel” systems; they are being bolted directly on to the machinery of traditional money. Out of this fusion have emerged three new asset classes: central-bank digital currencies, private stable-coins and on-chain claims on real-world assets (RWA). Together they are redrawing the map of money itself.

China’s response is unique. Instead of choosing “permission-less innovation” or “blanket prohibition”, Beijing is running a three-track strategy:

1. A sovereign retail CBDC (e-CNY) as the anchor of monetary power;

2. A hard ban on domestic stable-coin issuance, but a licensed sandbox in Hong Kong;

3. A state-sanctioned RWA market that tokenises green power, cultural tourism and infrastructure to feed real-economy funding needs.

The following pages decode each track and show how they fit together.

I. e-CNY – From Domestic Micropayments to Geopolitical Rail

1.1 Scale & Scene Depth – Crossing the Tipping-point

• By Aug-25 more than 260 million individual wallets have been opened in the 26 pilot cities; Beijing alone clears > RMB 300 billion a month.

• Use-cases have jumped the retail fence: agricultural subsidies released via smart-contract “money packets” that auto-execute when satellite data confirm harvest delivery; maglev trains in Shanghai accept offline, battery-less hard wallets—no network, no power, still pay.

• Treasury single-account reform is migrating to e-CNY rails, letting Ministry of Finance trace every yuan of local-government spending in real time.

1.2 Going Abroad – mBridge & the Dollar Bypass

• Oct-25: PBOC and Macau AMC sign a connectivity MoU; merchants on both sides of the Zhuhai-Macau border now settle instantly in e-CNY / MOP.

• Hong Kong: 38 000 local POS terminals upgraded; wallet limit lifted to RMB 50 000 p.a. for HKID holders.

• mBridge – the BIS-hosted DLT corridor with Thailand, UAE and HK – left beta in Sep-25. A Shanghai “Digital-RMB International Operations Centre” provides 24-hour liquidity; average FX leg cut from 2 days to 7 seconds, cost down 60 %.

• Policy wording: “e-CNY is the sole legal digital form of cash; no private ‘CNY-equivalent’ tokens may circulate onshore.” Translation: the CBDC is the sovereign rail, but offshore experiments can run if they feed back into yuan usage.

II. Stable-coins – Red Line onshore, Sand-box offshore

2.1 Mainland – Absolute Monetary Monopoly

• Early-25 PBoC explicitly blocked Ant & JD’s Hong Kong plans to mint CNH-backed stable-coins, citing “competitive disintermediation of monetary policy”.

• Zhou Xiao-chuan: “Stable-coins are quasi-money; unregulated they fracture the unit-of-account.”

• Yet industry not silenced: MIIT think-tanks continue to model tokenised freight bills and cross-border trade receivables – technology is studied, issuance is state-only.

2.2 Hong Kong – Licenced Gate-keeper Regime

• 1 Aug-25 Stable-Coin Ordinance live. Requirements:
  – Full banking licence or 100 % custody with an HKMA-approved bank;
  – Paid-in capital ≥ HKD 25 million;
  – Monthly attestations;
  – No algorithmic coins.

• Sandbox already houses two consortia:
  – ZA-Bank + Ant Digital for a CNH-linked coin focused on Belt-and-Road trade;
  – HSBC + HashKey for tokenised treasury bills aimed at MMFs.

• End-game: an offshore, fully-backed CNH coin that rides on mBridge, settling in e-CNY on the mainland leg – a two-tier “CNY currency area” on-chain.

2.3 Global – Guarding Against Regulatory Arbitrage

• FSB Oct-25 report flags “dangerous gaps” – US GENIUS Act demands US-Treasuries backing; Korea rushes capital-flight bill after USD 40.6 bn outflow in Q1-25.

• China’s stance: observe, participate in rule-setting (CPMI, FSB), but insulate domestic liquidity with fire-walled Hong Kong conduit.

III. RWA – Tokenise the Real, Green the Economy

3.1 First Movers – Green Electrons & Tourist Islands

• Anhui “Xun-Ying” battery-swap cabinets: 50 MW distributed storage tokenised on Conflux Tree-Graph; global investors subscribe via security tokens, smart-contract auto-splits 25 % IRR cash-flow.

• Dalian Xiao-Ping-Island: idle real-estate bundled into 1 m²-parcel NFTs; revenue from marina, hotel and fishing rights distributed daily in e-CNY.

• Benchmarking world: Synthesys in Singapore, Franklin Templeton’s Benji on BNB Chain; China’s twist – asset selection must serve carbon-neutrality or regional-development KPIs.

3.2 Tech & Compliance Stack

• IoT meters stream power-output data → hashed to chain → triggers coupon payment.

• HKMA “Project Ensemble” sandbox offers legal certainty for tokenised MMFs, bonds, carbon credits.

• Shenzhen Futian SOE’s RMB 50 billion offshore digital bond (Aug-25) settled coupon & principal in e-CNY – first on-chain debt instrument cleared in sovereign digital cash.

3.3 Strategic Upside – A 16 Trillion USD Market by 2030

• BCG forecast implies 10 % of global GDP could sit on tokenised balance-sheets.

• China’s play: export surplus + green infrastructure = underlying collateral; Hong Kong = pricing venue; e-CNY = settlement medium.

• End-goal: graduate yuan from “trade invoice currency” to “global capital-market pricing unit” without fully opening the capital account.

Conclusion – One Ledger, Three Speeds

China is building a digital-finance stack that is vertically integrated yet horizontally porous where required:

• Layer 0 – Monetary sovereignty: e-CNY, domestically monopolistic, programmable, identity-layered.

• Layer 1 – Regulatory membrane: Hong Kong licences foreign-facing stable-coins that must channel reserves back into CNH assets and, ultimately, PBOC rails.

• Layer 2 – Asset transformation: permissioned block-chains turn green kilowatt-hours, toll roads and UNESCO-rated islands into bearer instruments settled in state digital cash.

The architecture is cautious, deliberate and unapologetically top-down. It prizes financial stability over founder-led disruption, and national development goals over “community ownership” memes. Yet by keeping one foot in global rule-making forums and the other in experimental sandboxes, Beijing is positioning the yuan – and the real assets it can collateralise – at the centre of the next-generation monetary order.

The rest of the world can watch, participate or compete, but it can no longer ignore the blueprint.