The Global Stablecoin Race and a New Globalization: Digital Rails, Trade Policy, and Geopolitical Realignment via China’s Yuan Stablecoin and Emerging Digital Economic Areas
- Country : England
- Subject : Digital Economic
Keywords : China, stablecoins, RMB, USD, USDT, CBDC, BTC, SWIFT, MiCA, BTC demand, U.S. GDP, Sovereign currency, Inflation, Interest rate, national reserves, fiscal policy, monetary policy, Digital Economic Area
Abstract
The global monetary system is shifting from bank-centric pipes to programmable payment rails. Stablecoins are emerging as core infrastructure for cross-border settlement. Although the U.S. dollar anchors nearly all fiat-backed stablecoins today, this dominance is grounded in governance and trust rather than any technical moat. A new geography of money is forming around Digital Economic Areas (DEAs) as I conceptualized years ago as a new form of economic globalization: interoperable clusters of states and firms that share standards for identity, compliance, FX, and settlement. In DEAs, the rail itself becomes the policy surface, enabling tariffs, VAT, rules of origin, and sanctions to be enforced in code. China is advancing fastest toward this model. It is assembling a two-tier RMB stack—domestic e-CNY plus yuan-pegged stablecoins issued under Hong Kong’s licensing regime—integrated with CIPS and the mBridge CBDC network. This architecture could convert BRI, SCO, and BRICS corridors into a China-led DEA offering 24/7 settlement, lower costs, and reduced exposure to western chokepoints, raising RMB usage without requiring full capital-account liberalization. The paper applies the DEA + Frontier Curve of Functionalities (FCF) framework to RMB FX management and corridor mapping. It assesses a prospective China-led Digital Economic Area (DEA) in which GCC and ASEAN uptake raises RMB settlement and, by extension, RMB reserve demand. Our conclusion is that programmable rails reallocate monetary power: policy leverage accrues to whoever curates the rail’s identity, compliance, and FX/settlement standards, making rail governance a new axis of globalization.
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