The strategic focus of cryptocurrency in reconstructing the international monetary system and the Chinese solution

Author: Chen Jianqi, Vice President and Professor of the International Strategic Research Institute of the Central Party School (National Academy of Governance)

The world today is undergoing unprecedented changes not seen in a century, with profound adjustments in the global political and economic landscape, and the international monetary system facing shocks and challenges. At the same time, the rapid development of financial technology has given rise to cryptocurrencies such as stablecoins, which, with their unique technological characteristics and operational models, have a significant impact on the forms of currency, financial order, and even the international monetary system, prompting major countries to accelerate the layout of new monetary strategies.

General Secretary Xi Jinping emphasized the need to actively participate in the formulation of international rules for digital currencies and digital taxes to shape new competitive advantages. Cryptocurrencies have a considerable impact on China's international financial cooperation and create significant opportunities for enhancing China's international financial discourse power. It is essential to adapt to the new trends in the reform of the international monetary system, analyze the structural contradictions faced by the international monetary system under the century-long changes, grasp the key points and difficulties in implementing cryptocurrency strategies, explore the balance between centralization and decentralization, plan new strategies and solutions for cryptocurrencies, and promote the reform and improvement of the international monetary system.

I. Pressure and Motivation for the Reconstruction of the International Monetary System: Structural Contradictions and the Innovative Development of Cryptocurrencies

The international monetary system is always in a dynamic evolution process. A century ago, it was during the reconstruction period after World War I, and the future of the gold standard was a major concern. At that time, the famous British economist Keynes revealed the problems of the gold standard system, noting that gold was constrained by reserve and mining technology limitations, making it difficult to meet the global economic growth's demand for currency, and that the gold standard would lead to recurring deflation in the global economy.

After World War II, although the United States led the establishment of the Bretton Woods system through international coordination, creating a dual peg system for the dollar, the dollar crisis of the 1970s exposed the structural problems of dollar hegemony. Although the international monetary system later transitioned to a sovereign credit currency system, the current international monetary system is not perfect. The year 2024 marks the 80th anniversary of the Bretton Woods system's establishment, and the international monetary system, after a century of changes, still faces structural contradictions. The emergence of cryptocurrencies is seen as a new driving force for the transformation of the international monetary system.

(1) Pressure for the Reconstruction of the International Monetary System: Structural Contradictions of Dollar Hegemony

The structural problems of the international monetary system essentially remain the "Triffin Dilemma." Since the establishment of the Bretton Woods system, the dollar-dominated international monetary system has never completely resolved its inherent structural contradictions, and the "Triffin Dilemma" remains a prominent challenge. To meet the world's demand for international currency, the issuing country of the international currency must export currency through trade deficits, resulting in the issuing country needing to finance its deficits, which leads to continuous growth in national debt, increases in sovereign credit risk, and undermines external confidence in the stability of the international currency.

Maintaining the stability of the international currency requires addressing external imbalances, but solving external imbalances makes it difficult to meet the world's demand for the liquidity of international currency. The "Triffin Dilemma" ultimately revolves around how to address the unsustainable external deficits of the issuing country of international currency against the backdrop of the growing global demand for international currency.

Currently, the "Triffin Dilemma" of the international monetary system is primarily reflected in the unsustainable debt problem caused by the external imbalance of the United States. The dollar is the world's primary international currency, and the United States has a long-term trade deficit that exports a large amount of dollars to meet the world's demand for dollar liquidity. However, the result of the U.S. trade deficit is a significant surge in U.S. national debt, which, by the end of August 2025, had reached $37.3 trillion, with national debt accounting for more than 120% of GDP, surpassing levels seen during World War II.

The world is highly concerned about the risks of U.S. national debt, which affects confidence in the dollar. Both the dollar and U.S. debt are issued based on U.S. national credit; if there are problems with U.S. national debt, it indicates an increase in U.S. sovereign credit risk, which will inevitably impact the stability of the dollar-dominated international monetary system.

If the United States can adjust its external imbalances, then the problems of the international monetary system may be alleviated. The means by which the United States adjusts its trade deficits primarily include exchange rate adjustments and fiscal monetary policies; however, these adjustment measures face constraints. In terms of exchange rate adjustments, the dollar is a major international currency, and many countries' sovereign currencies use the dollar as an important reference. The depreciation or appreciation of the dollar often triggers synchronized adjustments in other countries' currency exchange rates, making it difficult for the U.S. to adjust external imbalances through exchange rates.

Moreover, a significant portion of U.S. exports consists of high-end manufacturing products and high-tech services, which are heavily influenced by technological barriers and trade protectionism. The impact of exchange rate fluctuations on their exports is limited. A large part of U.S. imports consists of essential goods, and even if the dollar depreciates, the volume of imports is unlikely to decrease significantly. In terms of fiscal monetary policy, domestic consumption is the main driver of economic growth in the U.S. Tight fiscal and monetary policies would reduce domestic demand and lower imports, thereby improving the trade deficit, but such measures would suppress U.S. economic growth, increase unemployment, and heighten recessionary pressures, leaving the U.S. lacking the motivation to implement such policies.

The difficulty in resolving the structural problems of the international monetary system also stems from the lagging reform of the international financial governance system. The issues of the international monetary system theoretically require joint solutions from countries around the world. Currently, the U.S. faces significant challenges in adjusting its external imbalances. If countries can work together to promote the establishment of a diversified monetary system and change the dollar-dominated international monetary system, then the structural problems of the international monetary system may be alleviated.

However, the contemporary world financial system remains dominated by the United States. As of the end of June 2025, the U.S. still held 16.49% of the voting rights in the International Monetary Fund (IMF), and major decisions in the IMF require over 85% of voting rights for approval, giving the U.S. a veto power in significant matters. Meanwhile, all past presidents of the World Bank have been American. Contemporary international financial governance is characterized by U.S. hegemonic governance, and any decision to change the status of the dollar clearly does not align with U.S. interests, and the U.S. will neither support nor agree to such changes.

(2) Motivation for the Reconstruction of the International Monetary System: Innovative Development of Cryptocurrencies

In the wave of digital technology reshaping the financial system, cryptocurrencies have evolved from marginal innovations to a key area of strategic competition among major powers. In June 2025, the U.S. House of Representatives passed the "Guidance and Establishment of a National Innovation Act for U.S. Stablecoins," requiring stablecoin issuers to have federal or state licenses and to hold U.S. dollars, bank deposits, or short-term U.S. Treasury bonds in a 1:1 ratio as reserves, anchoring stablecoins to the dollar and consolidating the dollar's position in the financial sector. In April 2023, the European Union released the "Regulation on Markets in Crypto-Assets," establishing the world's first regionally unified cryptocurrency regulatory framework. Cryptocurrencies have been recognized as an important variable affecting the international monetary system.

The rapid development of cryptocurrencies currently provides new opportunities for the reconstruction of the international monetary system. The emergence of Bitcoin in 2009 marked the beginning of the cryptocurrency development era. As of July 25, 2025, the total market value of the entire cryptocurrency market approached $4 trillion, with Bitcoin's market value reaching $2.36 trillion, accounting for about two-thirds of the total cryptocurrency market value. In addition to Bitcoin, other cryptocurrencies such as Ethereum (ETH), Ripple (XRP), Solana (SOL), Dogecoin, and Cardano (ADA) have also developed rapidly in recent years. Currently, the global cryptocurrency market has about 17,000 different cryptocurrencies. If we expand the scope to cryptocurrency tokens, CoinMarketCap estimates that there are nearly 11 million types. The rapid development of cryptocurrencies not only stems from the new financial formats spawned by digital finance but also provides new solutions to the problems of the international monetary system.

Cryptocurrencies are reconstructing the operational mechanism of the international monetary system. The current international monetary system is a sovereign credit currency system, where central banks of countries and major regions control currency issuance and establish a centralized clearing system through banks and other financial institutions. Financial regulatory authorities supervise financial behaviors such as capital circulation. However, the issuance of cryptocurrencies like Bitcoin is no longer limited to nation-states; non-official sectors and even virtual entities can issue cryptocurrencies.

The operation of cryptocurrencies no longer follows existing financial regulatory standards but is determined through code and community consensus. The IMF and the World Bank theoretically cannot directly influence cryptocurrencies. Cryptocurrencies bypass existing financial infrastructures and have a significant impact on financial regulation mechanisms, making the traditional operational mechanisms of the international monetary system clearly incompatible with cryptocurrencies, injecting tremendous momentum into the reconstruction of the operational mechanisms of the international monetary system.

Cryptocurrencies are reconstructing the imbalance adjustment mechanisms of the international monetary system. The core of the "Triffin Dilemma" in the international monetary system is the unsustainability of external imbalances, and cryptocurrencies objectively provide important solutions for external imbalances. Cryptocurrencies like Bitcoin are currencies based on internet platforms, possessing characteristics of supranational currencies that transcend national boundaries. If cryptocurrencies develop rapidly, the foreign exchange reserves of countries will be reflected in cryptocurrencies rather than in the sovereign currencies of any specific country, and the issuing countries of international reserve currencies will no longer be passively exporting currency to meet external liquidity needs, thus helping to avoid the problem of continuously expanding external imbalances.

Considering the current global reality, if cryptocurrencies become the primary currency, the U.S. will no longer need to provide dollar liquidity to the world through continuous trade deficits. For other countries, there will be no need to increase exports to the U.S. to obtain dollars, which could gradually alleviate the U.S. external imbalance.

II. Strategic Focus of Cryptocurrencies in Reconstructing the International Monetary System: Balancing Centralization and Decentralization

Cryptocurrencies provide new momentum for the reconstruction of the international monetary system. However, while cryptocurrencies bring development opportunities, they also present new challenges. Major countries in the world generally adopt a cautious attitude toward cryptocurrencies, necessitating a deep understanding of the key difficulties in the reform and development of the international monetary system from the perspective of operational mechanisms.

From the operational mechanism perspective, compared to traditional sovereign credit currencies, cryptocurrencies like Bitcoin achieve decentralized operation through blockchain technology, challenging the foundations of traditional centralized monetary systems. Currently, most countries' regulatory systems belong to centralized regulatory models. If a new regulatory model that adapts to decentralization cannot be promoted, then cryptocurrencies may give rise to significant challenges to national security. How to seek a balance between centralization and decentralization, and how to understand the theoretical logic and practical issues of monetary centralization and decentralization, are not only related to the development of cryptocurrencies but also represent prominent content in promoting profound changes in the international monetary system.

(1) Decentralized Characteristics of Cryptocurrencies

The decentralized characteristics of cryptocurrencies are rooted in the underlying architecture of blockchain technology. Modern society is an information society driven by the internet, which transcends national borders and lacks a centralized governance mechanism similar to a world government. It must rely on individuals on the internet to build a trust system. Blockchain provides an important solution for achieving this decentralized governance, namely through the collective maintenance of distributed ledgers, algorithmic autonomy of consensus mechanisms, and non-hierarchical governance of node networks, thereby constructing a decentralized trust system.

The decentralization of cryptocurrencies is not simply "no center," but rather a power decentralization achieved through blockchain technology, where distributed nodes collectively maintain network rules rather than relying on a single institution. Cryptocurrencies based on blockchain technology possess typical characteristics of decentralization, subverting the centralized model of traditional currency issued by central banks and cleared by commercial banks, releasing multiple innovative impacts in the context of international monetary system reform.

Decentralized cryptocurrencies break the monopoly of sovereign states over currency issuance. In the current system, centralized sovereign credit currencies are usually issued and managed by central banks, which strictly control the quantity of currency issued, its circulation scope, and transaction behaviors, dynamically adjusting the scale of currency supply based on changes in economic conditions, while the public passively accepts the currency supply from the central bank.

The total issuance of decentralized cryptocurrencies like Bitcoin is preset by algorithms, with Bitcoin's total supply fixed at 21 million coins, breaking the traditional model of centralized institutions like central banks monopolizing issuance and management. In the networks of cryptocurrencies like Bitcoin, there is no single central node controlling the entire system; tens of thousands of miner nodes globally participate in transaction verification and block generation through competitive computing power, collectively maintaining the consistency of the ledger according to preset algorithmic rules, with transaction information directly propagated and confirmed between peer nodes without the need for third-party intermediaries.

Decentralized cryptocurrencies have inclusivity and significant efficiency advantages. Influenced by factors such as bank processing, remittance channels, and international settlement systems, a traditional cross-border remittance typically takes about 3 to 5 working days from the point of sending to the final arrival in the recipient's account, with transaction fees accounting for 1% to 3% of the transaction amount. In contrast, decentralized cryptocurrency transactions based on blockchain achieve peer-to-peer settlement, significantly reducing average transaction costs and shortening settlement times to minutes.

Decentralized cryptocurrencies can facilitate financial transactions as long as there is internet access, enabling regions or groups lacking financial services to access financial services, thus promoting the globalization of financial inclusivity. According to World Bank data, 1.7 billion adults globally are still not covered by traditional financial services. The no-threshold financial participation rights of cryptocurrencies allow individuals to participate in financial activities through digital wallets with just a smartphone and internet connection, enabling functions such as transfers, savings, and loans, greatly enhancing financial inclusivity.

(2) Challenges of Decentralized Cryptocurrencies

Decentralized cryptocurrencies pose new challenges to financial regulatory governance. Under the existing framework, financial regulation relies on clear responsible entities, centralized data tracking, and hierarchical law enforcement systems. However, the anonymity, cross-border liquidity, and code autonomy characteristics of cryptocurrencies make it difficult for regulatory agencies to determine jurisdictional boundaries in real-time, trace the flow of funds, and even effectively punish violations.

Although some countries are building transaction tracing systems to regulate decentralized cryptocurrencies, this method is retrospective and difficult to implement for preemptive risk prevention. Even if tracing is possible, the lack of a joint regulatory system by a world government makes international coordination challenging, and non-official cryptocurrencies stored in other countries cannot be effectively controlled. Decentralized cryptocurrencies conflict with the centralized governance model of sovereign states, which is a deep-seated reason why governments find it difficult to effectively regulate decentralized cryptocurrencies individually.

Decentralized cryptocurrencies give rise to new challenges to national security. They provide new channels for illegal transactions involving drugs, firearms, and ammunition, constituting new challenges to national security. A crucial aspect of illegal transactions like drug trafficking is monetary payment. Decentralized cryptocurrencies do not require financial intermediaries for settlement and can bypass national regulation, allowing for simultaneous offline transactions and online payments for illegal activities.

Moreover, terrorist organizations that threaten national security often face severe sanctions from the international community, restricting their financing and freezing financial assets. However, terrorist organizations can create cryptocurrency financial communities through decentralized cryptocurrencies, avoiding external society's grasp of their movements through financial transactions, making their actions harder to monitor and objectively increasing uncertainty regarding national security.

Decentralized cryptocurrencies have reached a scale sufficient to influence systemic risks. As of the first quarter of 2025, among the currency types in foreign exchange reserves, the euro's foreign exchange reserve assets amounted to $2.3346 trillion, the pound's to $603.7 billion, the yen's to $599.1 billion, and the renminbi's to $246.3 billion, while Bitcoin's market value had exceeded $2 trillion, making it the third-largest international reserve currency after the dollar and euro. Furthermore, cryptocurrencies are accelerating the creation of new financial forms, involving a wide range of areas such as online payments, asset custody, financial transactions, digital wallets, supply chain finance, and insurance, with unofficial cryptocurrencies already capable of influencing global systemic financial risks.

(3) Key Focus of Reconstructing the International Monetary System: Balancing Centralization and Decentralization

The decentralized characteristics of cryptocurrencies give them the potential to reconstruct the international monetary system, but decentralization challenges the mainstream model of contemporary global financial centralized governance. How to balance the relationship between the two becomes a key focus of international monetary system reform. From the perspective of financial stability, decentralized cryptocurrencies present high volatility and high-risk issues. Introducing centralized governance mechanisms can help reduce disorderly fluctuations in the cryptocurrency market and avoid systemic risks.

From the perspective of financial efficiency, a reasonable balance can leverage the dual advantages of centralization and decentralization, achieving complementary strengths that optimize payment and clearing systems, enhance the speed of capital circulation, and reduce transaction costs. From the perspective of financial innovation, decentralization helps promote innovation in financial products and services, but centralized management of non-centralized cryptocurrencies helps return finance to its essence, focusing on serving the development of the real economy.

Centralized exchanges are an important practice for promoting the balance between centralization and decentralization, but they still face challenges. In recent years, the demand for cryptocurrency trading has grown significantly, and providing a more convenient platform for buyers and sellers has become an urgent issue for cryptocurrency development. In this context, centralized exchanges like Binance and Huobi have developed rapidly.

Through the centralized governance platform of exchanges, trading methods and means are continuously innovated, and order processing speeds have significantly improved, allowing more people to engage with cryptocurrencies, reflecting the importance of balancing centralization and decentralization. However, centralized exchanges also bring new problems, with security being a focal point of external concern. In 2014, Mt. Gox, then the world's largest Bitcoin exchange, lost 850,000 Bitcoins due to mismanagement and technical vulnerabilities, accounting for 7% of the circulating supply at the time. This incident triggered a significant drop in Bitcoin prices, causing many investors to lose their investments, highlighting the enormous risks posed by the concentration of power and lack of effective regulation in centralized exchanges.

Stablecoins are seen as the mainstream model for balancing centralization and decentralization. Unlike fully decentralized cryptocurrencies like Bitcoin, stablecoins require issuers to meet certain entry thresholds. Institutions issuing stablecoins must be approved by the state, and the state's management of issuing institutions is centralized. However, once stablecoins are issued, their operation is based on a decentralized model through blockchain, with regulatory authorities overseeing the collateral assets of issuing institutions to ensure that stablecoins are backed by corresponding assets, preventing Ponzi schemes. The collateral assets of issuing institutions mainly consist of reserves of fiat currencies or sovereign bonds.

Currently, mainstream stablecoins mainly include USDT and USDC, which account for over 80% of the global stablecoin market value. Stablecoins leverage decentralization to reduce the circulation costs of traditional financial capital while alleviating the price volatility of cryptocurrencies through anchoring to sovereign currency assets, playing a key role in scenarios such as crypto trading and decentralized finance (DeFi).

III. China's Cryptocurrency Solutions in the Context of the Reconstruction of the International Monetary System: Dual-Driven Approach

In the context of the accelerated evolution of the global cryptocurrency landscape, China is integrating into the global cryptocurrency ecosystem through stablecoin pilots and expanding new space for cryptocurrency development through the digital renminbi, balancing centralization and decentralization, and laying a solid foundation for China to seize financial high ground in the digital economy era, taking the initiative in the financial game of the digital age.

(1) Hong Kong Pilot: Connecting with the International Stablecoin Ecosystem

Establishing comprehensive regulatory new rules for stablecoins. In October 2022, the Hong Kong Special Administrative Region government released the "Policy Declaration on the Development of Virtual Assets in Hong Kong," announcing its determination to compete as a global virtual asset center. In June 2023, the Hong Kong Securities and Futures Commission issued "Guidelines for Virtual Asset Trading Platform Operators," clarifying the standards and regulations applicable to licensed trading platforms, including prudent asset custody, segregation of client assets, avoidance of conflicts of interest, and cybersecurity. In August 2025, Hong Kong implemented the "Stablecoin Ordinance," the world's first comprehensive regulatory legislation for fiat-backed stablecoins, marking an important milestone in the global digital financial regulatory field.

After the implementation of the "Stablecoin Ordinance," anyone issuing fiat-backed stablecoins in Hong Kong or claiming to issue fiat-backed stablecoins anchored to the value of the Hong Kong dollar must apply for a license from the Financial Management Commissioner. Hong Kong imposes strict entry and ongoing supervision on stablecoin issuers, requiring stablecoins to be 100% backed by highly liquid assets (cash, short-term government bonds, etc.), daily disclosure of reserve composition, and weekly submission of audit reports. The capital and reserve paid-in capital must not be less than HKD 25 million, and sufficient liquid net assets must be maintained.

Before issuing licenses to stablecoin issuers, Hong Kong will launch a stablecoin sandbox pilot starting in March 2024. The first batch of institutions included three companies: JD Coin Chain Technology, Yuan Coin Technology, and a joint venture of Standard Chartered Bank. JD Coin Chain Technology issues the Hong Kong dollar stablecoin JD-HKD, focusing on cross-border payment and supply chain finance scenarios, collaborating with Tsinghua Bank for reserve custody, and integrating with JD's retail payment testing in Hong Kong and Macau. Yuan Coin Technology launched the Hong Kong dollar stablecoin HKDR, focusing on international cooperation in cross-border payment business, with Zhong An Bank as the reserve custodian. The joint venture of Standard Chartered Bank (Standard Chartered, Anxi Group, Hong Kong Telecommunications) issues the Hong Kong dollar stablecoin HKDG, with Standard Chartered responsible for fund custody, Anxi constructing smart contracts, and Hong Kong Telecommunications providing payment access for cross-border trade settlement.

Building a "regulatory sandbox + capital closed-loop" mechanism. Stablecoin transactions participating in the pilot must be settled through the digital asset cross-border flow monitoring platform established by the Hong Kong Monetary Authority, with all fund flows forming a closed-loop exchange between the renminbi and stablecoins, avoiding the impact of foreign stablecoins on the domestic currency system while providing a new channel for cross-border trade settlement. Leveraging its position as an international financial center, Hong Kong absorbs technical experiences and governance rules from the global stablecoin ecosystem, providing practical samples for China to participate in the formulation of international digital financial standards. The "domestic closed-loop + foreign interconnection" structure ensures that international stablecoins can only circulate in controllable scenarios, avoiding challenges to the sovereignty of the currency.

(2) Digital Renminbi: Independent Innovation of Cryptocurrencies

Before the Hong Kong stablecoin pilot, the research and application of the digital renminbi had already begun. As early as 2016, the People's Bank of China established the Digital Currency Research Institute to conduct specialized research on the issuance framework, key technologies, issuance and circulation environment, and relevant international experiences. In 2018, the People's Bank of China formulated the research framework for the digital renminbi as a foundational guideline for research work. In July 2021, the Digital Renminbi Research Working Group of the People's Bank of China released the white paper "Progress in the Research and Development of China's Digital Renminbi," systematically disclosing the top-level design ideas for the first time, namely under a dual-layer operational system, on one hand, the central bank ensures its ability to regulate currency issuance and monetary policy through centralized management; on the other hand, it fully utilizes the existing resources, talents, and technologies of commercial institutions, driving market competition to decentralize risks and avoid financial disintermediation.

As of the end of July 2024, the digital renminbi app had cumulatively opened 180 million personal wallets, with a total transaction amount of 7.3 trillion yuan in pilot areas (Chen Guojing: "The application scenarios of the digital renminbi are becoming more diverse," Economic Daily, April 3, 2025). The digital renminbi adopts a "hybrid architecture," retaining the central bank's centralized issuance and regulatory authority while absorbing the advantages of distributed ledger technology through the central bank digital currency bridge to achieve efficient collaboration across institutions and regions.

The application scenarios of the digital renminbi are continuously expanding. In terms of serving technology finance, the digital renminbi integrates with existing financial products such as loans, discounts, and subsidies, providing higher efficiency support for financing innovative enterprises, allowing relevant funds to reach end enterprises directly, focusing on reducing circulation costs and enhancing efficiency.

In terms of serving green finance, the digital renminbi, combined with blockchain technology, conducts full-process tracing of data related to carbon reduction, achieving a connection between green production and living and the financial system. The digital renminbi has already been applied in various green and low-carbon scenarios such as public transportation, clean energy, and circular economy. In terms of serving inclusive finance and pension finance, it organically combines functions such as digital governance, smart governance, and wage distribution with digital inclusive finance, ensuring the efficient circulation and safe operation of social security funds, using the digital renminbi in the distribution of pensions and elderly assistance funds to ensure precise fund distribution, transparent circulation, and secure management.

(3) Dual-Driven Approach: China's Solution for Balancing Centralization and Decentralization

China's approach provides a third path for the global development of cryptocurrencies. The U.S. dominates the cryptocurrency ecosystem with stablecoins like USDC and USDT, while the EU emphasizes building a strict regulatory framework. China implements a dual-driven development strategy for cryptocurrencies, presenting a tripartite balance in the cryptocurrency development landscape.

The digital renminbi focuses on exploring centralized governance of cryptocurrencies, while the Hong Kong stablecoin pilot explores the balance between centralization and decentralization. The two complement and promote each other, constructing a new development plan for China's cryptocurrencies in the digital financial era. The digital renminbi promotes retail payments and government services, while the Hong Kong stablecoin promotes cross-border trade, forming a dual-driven situation that safeguards currency sovereignty while promoting digital financial innovation.

China's approach achieves a unity of efficiency and security in cryptocurrency development. The U.S.-led stablecoin ecosystem prioritizes market efficiency but has yet to establish a corresponding regulatory system, raising concerns about the potential financial risks, especially systemic risks, arising from the decentralization of the stablecoin market.

The EU's strict regulatory model ensures safety but stifles innovative vitality. China achieves a balance between the two through its "dual-driven" institutional design, providing a new paradigm for global digital financial governance. The Hong Kong Monetary Authority is responsible for controlling the cross-border flow of stablecoins, while the digital renminbi system monitors the final flow of funds, avoiding the suppression of innovation by centralized regulation while preventing the disorderly expansion brought about by decentralization, finding a dynamic balance between regulation and management.

China's approach realizes the autonomy of cryptocurrency development. Currently, cryptocurrency development faces a dilemma: fully lifting restrictions on cryptocurrencies may lead to systemic financial risks, while a complete ban would miss new opportunities in digital finance. China's dual-driven strategy adheres to independent innovation and controllable openness, embracing cryptocurrency innovation while maintaining financial security.

The technical experiences accumulated from the Hong Kong stablecoin pilot, such as cross-chain monitoring and smart contract auditing, provide references for the development of the digital renminbi's cross-border system. The "distributed ledger + centralized regulation" hybrid architecture of the digital renminbi offers technical references for the regulation of Hong Kong stablecoins. Stablecoins and the digital renminbi are not in a mutually exclusive or competitive relationship but rather complement each other, achieving a balance between regulatory effectiveness and user privacy through a dual-driven approach.

In summary, the rapid development of cryptocurrencies like Bitcoin provides new choices for the reform of the international monetary system. Countries around the world are accelerating their layouts for cryptocurrency strategies, while the U.S. Trump administration implemented a stablecoin strategy to maintain the dollar hegemony system.

However, cryptocurrencies rely on blockchain technology to address the prominent challenges of centralized governance in the current international monetary system through their decentralized characteristics. Still, decentralization faces new challenges that affect national security, such as evading regulation, terrorism, and money laundering. The cryptocurrency strategies of major countries focus on how to balance centralization and decentralization. In this regard, China is conducting stablecoin pilots through Hong Kong as an international financial center while implementing the digital renminbi strategy, providing a Chinese solution for balancing centralization and decentralization and promoting the reconstruction of the international monetary system.