China has launched the world's first regulated offshore yuan-linked stablecoin, AxCNH, in Kazakhstan, marking a significant development in global financial innovation and the internationalization of its currency. The initiative, operational since September 17, 2025, aims to leverage blockchain technology to enhance cross-border trade and challenge the dominance of the U.S. dollar in digital finance.
The launch was facilitated by Hong Kong-based fintech firm AnchorX, utilizing the blockchain infrastructure of Conflux. Kazakhstan's financial authorities granted regulatory approval, positioning the Central Asian nation as a key partner in this venture. Yang Guang, Chief Technology Officer at Conflux, suggested the launch could have a "butterfly effect" on cross-border payment systems.
AxCNH is a strategic element in China's broader objective to elevate the yuan's global standing. Despite being the world's second-largest economy, China has faced challenges in expanding the yuan's international use due to strict capital controls. Stablecoins, pegged to stable assets like fiat currency, offer a pathway to circumvent these limitations and promote wider yuan adoption in international trade. AnchorX promotes AxCNH as a cost-effective and efficient payment solution for faster, more reliable, and less expensive transactions, particularly between Belt and Road Initiative (BRI) countries and offshore Chinese companies.
Kazakhstan's role is strategically important, as the country has been actively developing a conducive regulatory environment for digital assets. This proactive approach positions Kazakhstan as a crypto-friendly hub and a facilitator of financial technological advancement. The launch of AxCNH is expected to streamline financial flows within BRI corridors and potentially mitigate risks associated with dollar-based sanctions.
The underlying technology is provided by Conflux, a high-performance public blockchain known for its hybrid consensus mechanism combining Proof of Work (PoW) and Proof of Stake (PoS). Conflux can achieve high throughput, up to 3,000 transactions per second, while maintaining decentralization. This robust infrastructure is designed to efficiently support complex financial applications and cross-border transactions. The involvement of Conflux, a blockchain network with official backing in China, underscores Beijing's strategic emphasis on developing domestic blockchain capabilities for international financial applications.
This development aligns with a broader global trend of nations exploring digital currencies to reshape financial landscapes and reduce reliance on traditional reserve currencies. As China actively promotes yuan internationalization through various channels, including its central bank digital currency and now stablecoins, the global financial system is moving towards a more diversified and multipolar future. The success of AxCNH will be a key indicator of the potential for yuan-linked stablecoins to gain traction in international trade and challenge the long-standing dominance of the U.S. dollar in the digital asset space.
