Conflux Network has announced two major initiatives: the issuance of a stablecoin pegged to the offshore Chinese yuan and the launch of its Conflux 3.0 upgrade in August. These efforts signal Beijing’s intensifying interest in leveraging blockchain technologies for cross-border finance - while sidestepping domestic crypto restrictions.
The announcements were made during a recent Conflux conference and later confirmed through Chinese state-affiliated media on the Shanghai government’s website.
Conflux, a Layer 1 blockchain often described as “China’s only regulatory-compliant public chain,” revealed its partnership with fintech firm AnchorX and Shenzhen-listed Eastcompeace Technology to issue stablecoins backed by the offshore yuan.
According to the project team, the upcoming stablecoin is being designed specifically for use in countries involved in China’s Belt and Road Initiative (BRI) = a transcontinental development strategy aiming to enhance infrastructure, trade, and digital connectivity across Asia, Europe, and Africa. With over 140 countries having signed BRI memoranda of understanding, the initiative could serve as fertile ground for expanding adoption of a digital yuan derivative.
This move appears to complement Beijing’s broader aspirations to internationalize the yuan and establish an alternative payment infrastructure outside the dollar-dominated SWIFT system. However, rather than promoting its central bank digital currency (e-CNY) for international settlement - a system largely confined to domestic pilot programs - China may be using blockchain-native, offshore-yuan stablecoins as a parallel instrument for foreign currency circulation.
AnchorX and the Role of AxCNH
Conflux previously disclosed that AnchorX is actively exploring the issuance of a stablecoin called AxCNH, pegged 1:1 to the offshore yuan. The Conflux Network would serve as the technical foundation, offering the scalability and smart contract functionality necessary to support such an asset across borders.
Eastcompeace Technology, a digital ID and financial services firm partially state-owned and listed on the Shenzhen Stock Exchange, brings additional credibility and institutional access to the project.
Following the announcement, Eastcompeace’s stock surged 10% on Monday to 20.33 yuan, hitting Shenzhen’s daily price increase limit - a sign that Chinese investors may be pricing in the growing strategic relevance of blockchain infrastructure tied to state-backed financial goals.
The offshore yuan, distinct from the tightly controlled onshore yuan (CNY), is traded primarily in international markets like Hong Kong and Singapore. Its use in a blockchain-based stablecoin could enable new channels for Chinese capital to flow through Belt and Road economies while circumventing some domestic restrictions.
Conflux 3.0 Launch in August: Scaling Cross-Border Finance
In parallel with its stablecoin ambitions, Conflux announced that Conflux 3.0 - a major network upgrade - is set to go live in August 2025. The upgraded blockchain will reportedly offer processing capabilities of up to 15,000 transactions per second, significantly expanding the network’s capacity for enterprise and government-level applications.
According to developers, the upgrade aims to facilitate large-scale settlement of real-world assets (RWAs) and cross-border payments - two sectors that have gained increased attention from both institutional finance and public sector actors worldwide.
While the announcement lacked full technical documentation, the project has previously employed a hybrid consensus mechanism (Tree-Graph) and aims to combine the scalability of DAGs with the security of proof-of-stake blockchains.
In addition to throughput, the upgrade is expected to improve developer tools, modularity, and interoperability. Conflux has hinted at building more bridges with public and permissioned blockchains, which would support integration with traditional financial institutions and existing payment rails.
Price Reactions and Market Activity
Following the dual announcement, Conflux’s native token CFX surged more than 57% within 24 hours, climbing to $0.22 with a market capitalization of approximately $1.1 billion, according to data from The Block.
The price rally suggests a renewed investor interest in Conflux as one of the few Chinese blockchain projects with a semi-permissive relationship with state authorities.
However, market observers have noted that CFX remains well below its all-time high of $1.70 reached in early 2021, indicating continued uncertainty about long-term adoption and regulatory stability. Trading volumes also saw a temporary spike, though it's unclear whether this marks the beginning of sustained institutional positioning or a short-lived speculative pump.
China’s Shifting Stance: From Crypto Ban to Digital Finance Exporter
The Conflux announcement must be understood in the broader context of China’s evolving position on digital assets. While the mainland continues to enforce a ban on cryptocurrency trading and mining, including Bitcoin and Ethereum, it has simultaneously promoted digital yuan pilot programs and backed private partnerships to explore alternative stablecoin systems for offshore use.
Central bank governor Pan Gongsheng recently acknowledged in June that “stablecoins and central bank digital currencies are reshaping global payment infrastructure.” These comments suggest that the People’s Bank of China (PBOC) recognizes the strategic importance of programmable, blockchain-based currencies - even if domestic retail crypto remains off-limits.
Concurrently, Chinese technology giants like JD.com and Ant Group are reported to be lobbying regulators to allow offshore yuan-based stablecoins for international payments and e-commerce settlement. A Reuters investigation cited sources close to the matter, suggesting that high-level discussions with the PBOC are ongoing, though no formal policy has yet been announced.
Hong Kong as a Stablecoin Testbed
The move toward offshore stablecoins coincides with the Hong Kong Monetary Authority’s licensing regime for stablecoin issuers, which is set to begin on August 1, 2025. This creates a timely regulatory framework that could allow entities like AnchorX or Eastcompeace to issue yuan-backed stablecoins under Hong Kong’s relatively open but supervised crypto rules.
Hong Kong, while technically part of China, operates under a separate legal and regulatory system under the “one country, two systems” policy. In 2023 and 2024, Hong Kong introduced crypto exchange licenses and allowed retail trading of major digital assets, placing itself in contrast to mainland restrictions.
Should AxCNH or similar tokens be launched from Hong Kong, it would mark a new phase in China's experimentation with digital currency without disrupting its internal monetary controls.
Geopolitical Implications and Risks
The deployment of offshore yuan stablecoins across Belt and Road countries would have implications beyond crypto. It could serve as a soft-power tool, allowing Chinese financial systems to become more deeply embedded in the digital infrastructure of developing economies.
Over time, this could increase yuan settlement in trade, reduce reliance on SWIFT, and challenge dollar hegemony in select corridors.
However, such ambitions come with geopolitical risk. U.S. lawmakers have already expressed concern over the role of Chinese-backed fintech and blockchain platforms in circumventing sanctions or exporting surveillance-friendly tech. Should offshore yuan stablecoins gain traction, they may become a new flashpoint in U.S.–China financial tensions.
Furthermore, stablecoin issuance remains a contentious issue globally, with regulators in the U.S., EU, and Asia calling for enhanced oversight of backing reserves, issuer accountability, and monetary policy risks. Whether Conflux, AnchorX, or any affiliated entities will pass such scrutiny - especially in countries wary of Chinese tech influence - remains to be seen.