Yuan and Won-Pegged Stablecoins Bolster Sovereign Currencies in Digital Finance

- AnchorX launches AxCNH stablecoin to internationalize yuan via blockchain. - BDACS unveils KRW1 stablecoin to modernize cross-border payments in Korea. On September 17, 2025, financial technology firm AnchorX introduced AxCNH at the 10th Belt and Road Summit in Hong Kong. AxCNH is a stablecoin pegged to the offshore Chinese yuan (CNH) and is fully collateralized on a 1:1 basis with CNH reserves. AnchorX designed it to streamline cross-border payments and facilitate trade settlements for Chinese enterprises and their partners in the Belt and Road Initiative. In addition, the company has formed early partnerships with Lenovo and Zoomlion to explore AxCNH's applications in international trade. A day later, on September 18, South Korean digital asset firm BDACS introduced KRW1 on the Avalanche blockchain. KRW1 is a stablecoin pegged to the Korean won and is fully backed by won deposits held in escrow at Woori Bank, a leading South Korean financial institution. Currently in its proof-of-concept phase, the stablecoin is not yet available for public circulation, as it awaits regulatory approval under South Korea’s forthcoming Digital Asset Basic Act. BDACS has outlined several use cases for KRW1, including remittances, payments, and potential public-sector disbursements. These launches highlight an emerging trend where national governments are leveraging blockchain-based stablecoins to assert monetary sovereignty and enhance the global significance of their currencies. For China, AxCNH represents a strategic move to further internationalize the yuan and reduce reliance on the U.S. dollar, especially within Belt and Road trade networks. Similarly, South Korea’s KRW1 aligns with its broader digital finance strategy, which seeks to bolster the nation's financial ecosystem and reduce dependence on dollar-based stablecoins. However, the stablecoin market remains dominated by U.S. dollar-pegged tokens. According to EZ Newswire on September 21, these tokens account for over 99% of the market share. By issuing their own stablecoins, China and South Korea aim to carve out space for their currencies in the tokenized economy, combat inflationary pressures, and diversify global liquidity options. As stablecoins backed by sovereign currencies gain traction, nations are responding. Countries like China, South Korea, and the European Union are actively crafting regulatory structures to balance innovation with stability. While this shift could enhance cross-border transaction efficiency, the proliferation of national stablecoins also risks fragmenting the global financial ecosystem into competing digital currency blocs. On September 21, CoinMarketCap reported that Tether USDt (USDT) continues to dominate the stablecoin market, trading at $1.001 with a 0.004% change in 24-hour volume.