China’s Energy Giant Eyes Stablecoins for Cross-Border Transactions

The buzz around stablecoins continues, and now a major Chinese energy company is showing interest in their use for international trade. PetroChina, a subsidiary of China National Petroleum Corporation, is watching developments in Hong Kong closely as it considers the potential of stablecoins for cross-border payments.

PetroChina Signals Interest in Yuan-Backed Stablecoins

Wang Hua, the company’s Chief Financial Officer and Board Secretary, highlighted the interest during PetroChina’s half-year financial results, signaling that the firm may explore using digital currencies for settlement purposes.

The move reflects a broader effort to promote the international use of the yuan. Historically, oil trade has been dominated by the U.S. dollar. Adopting a yuan-backed stablecoin could allow China to settle transactions more efficiently in its own currency, supporting the yuan’s growing role in global energy markets.

Hong Kong’s Licensing Framework

Hong Kong recently implemented a new stablecoin ordinance, effective August 1, which sets rules for digital currency issuance and regulation. 

Meanwhile, the Hong Kong Monetary Authority (HKMA) has introduced a licensing framework that would apply to institutions planning to issue or support stablecoins. Companies that consider themselves ready can submit applications early, with a target date of September 30, 2025, for priority review.

Several Chinese firms, including JD.com and Ant Group, have expressed interest in issuing yuan-backed digital tokens and may participate once licensing is available.

Yuan-Backed Digital Currency in Oil Trade

Wang Hua’s statement could be interpreted as indicating PetroChina’s potential interest in becoming a stablecoin issuer. If a major energy company such as PetroChina were to adopt stablecoins for cross-border transactions, it could make international payment settlements more efficient.

China has been settling an increasing portion of its energy trade in yuan, a system sometimes referred to as the “petro-yuan.” Trade with Russia, for example, relied heavily on local currencies such as the yuan and the rouble, with 2024 seeing the majority of transactions conducted in these currencies. 

Using a digital version of the yuan for such trades could further integrate it into international energy markets and support the expansion of digital payments.

Stablecoins Under Scrutiny as China Considers Future Use

Despite the growing interest in stablecoins, Chinese regulators have taken a cautious approach:

• In early August, renminbi-backed stablecoins were tested to explore ways to reduce reliance on the U.S. dollar.
• Shortly afterward, Chinese regulators asked major domestic brokers to halt research promoting stablecoins.
• The move aims to curb growing interest in the digital currency among local investors.

Still, China has not abandoned the idea entirely. According to Reuters, the State Council is expected to discuss expanding the use of yuan-backed stablecoins at the upcoming Shanghai Cooperation Organization (SCO) summit. Such a move could provide clarity on the regulatory framework for this digital asset and its potential role in cross-border trade.