The Necessary Path for China's "Offshore RMB Stablecoin": The Internal-External Combined Dual-Track System Becomes a Key Strategy

Recently, the public account of the National Financial and Development Laboratory of the Chinese Academy of Social Sciences published an article titled "The Development Model of RMB Stablecoin Can Be 'Combined Inside and Outside'". This article quickly sparked widespread discussion within institutional circles. Its core viewpoint is to simultaneously pilot different offshore RMB stablecoins with varying focuses in domestic free trade zones (such as Shanghai) and offshore markets (such as Hong Kong). Through a dual-track collaboration, it breaks through traditional regulatory boundaries, forming technological complementarity and policy synergy, essentially providing a 'new expressway' for RMB cross-border payments. This proposal points out a new direction for the development of RMB stablecoins and indicates that Hong Kong will play a key role in it.

1. The "Internal and External Combination" Model of the Renminbi Stablecoin

The "internal-external integration" model proposed in the article aims to address the issue of the limited scale of offshore RMB funding pools and provide a broader space for RMB cross-border payments:

Shanghai: Focus on enterprise bulk trade and cross-border settlement, issued by large banks/payment institutions, securely circulating within the "electronic fence" blockchain of the free trade zone, addressing the issues of slow cross-border payments and numerous procedures for enterprises.

Hong Kong: Aimed at global enterprises and individual users for daily payments, leveraging its status as an international financial center to expand retail scenarios.

In this dual-track system, the enterprise coin (CNYC) in Shanghai and the personal coin (CNHC) in Hong Kong will achieve interconnectivity through technologies such as the digital yuan, integrating domestic and foreign capital pools, and expanding the scale of the yuan stablecoin.

II. Dual-track system: Breaking the shackles of the capital pool, challenging the hegemony of the US dollar stablecoin

The offshore RMB liquidity pool is only about 1.2 trillion yuan, and considering leverage effects, it can only achieve a scale of 1.8 trillion, which is difficult to meet the scale of global trade settlement in the billions. If it is only a single-track system in Hong Kong, it is like a "tree without roots." Although there are international channels, it lacks support from the domestic real economy and liquidity, making it difficult to gain traction. In that case, the RMB stablecoin will become a niche product.

If a dual-track system is implemented, it would be like upgrading from a bird gun to a cannon:

Shanghai is the "root": rooting in the real economy of the mainland, providing real demand and liquidity.

Hong Kong is "Leaf": extending its reach globally to realize scene implementation.

Digital Renminbi is the "stalk": technology connects the dual tracks, ensuring the safe flow of funds.

The ultimate goal is to upgrade the renminbi stablecoin from an "offshore niche tool" to the "core infrastructure serving global trade" through dual-track collaboration, truly challenging the hegemony of the US dollar stablecoin.

3. How does the dual-track system achieve the expansion of the fund pool?

In the dual-track system, since the Shanghai Free Trade Zone is also linked to the offshore renminbi like Hong Kong, how does it achieve an overall effect that breaks through the funding pool constraint of only 18 trillion under Hong Kong's single-track system? Moreover, the goal of the dual-track system is to realize a scale of several tens of trillions.

The key point is: domestic enterprises (within the Shanghai Free Trade Zone) exchange CNYC stablecoins through a special channel for digital renminbi (e-CNY), and then pay to overseas trading partners. Essentially, this allows domestic renminbi funds that could not flow freely to be legally converted into CNYC (linked to CNH) through a central bank approval channel, thereby achieving the effect of offshore renminbi fund pools receiving incremental support from domestic sources.

For this part of the incremental supplementation supported by underlying liquidity and yield, the official prescribed maximum leverage effect is 5 times (4 times is reasonable in actual operation), which means that for every 100 trillion of domestic incremental supplementation, the offshore RMB fund pool can be expanded by 400 trillion.

Conclusion

The "internal and external integration" dual-track model proposed in the article points out a new expressway for the development of the RMB stablecoin. This not only hopes to break through the scale limitations of the offshore RMB fund pool, but also upgrades the RMB stablecoin from a "niche offshore tool" to a "core infrastructure serving global trade," thereby challenging the hegemony of the US dollar stablecoin. The implementation of this strategy will have a profound impact on the global financial landscape.