Core Viewpoint - The article discusses the limited adoption of stablecoins for cross-border payments among merchants in China, particularly in Yiwu and Shenzhen, highlighting a general lack of understanding and skepticism regarding their use [1][4][10]. Group 1: Merchant Awareness and Usage - Most merchants in Yiwu and Shenzhen are unaware of stablecoins, with only a few expressing interest in using them for transactions [1][4]. - A small number of merchants indicated they might consider using stablecoins for international payments, but none reported having completed such transactions [4][5]. - Merchants primarily rely on traditional payment methods like cash and Alipay for foreign transactions, with stablecoins seen as irrelevant by many [5][10]. Group 2: Stablecoin Characteristics and Market Dynamics - Stablecoins, such as USDT, are pegged to fiat currencies, providing a more stable alternative to other cryptocurrencies, which may enhance their appeal for transactions [1][10]. - The article notes that stablecoins can bypass traditional banking systems like SWIFT, allowing for direct peer-to-peer transactions, although their legality in mainland China remains uncertain [10][11]. - The exchange process for stablecoins involves "U merchants" who facilitate the conversion between stablecoins and fiat currencies, often with varying fees and conditions [8][11]. Group 3: Regulatory and Compliance Issues - The use of stablecoins for cross-border payments in China faces significant regulatory risks, as recent warnings from local authorities highlight concerns over illegal fundraising activities associated with stablecoins [11][12]. - Legal experts emphasize that while personal trading of virtual currencies may be permissible, using stablecoins for business transactions is currently not allowed in China [11].

Core Viewpoint - The adoption of stablecoins for cross-border payments is still limited among merchants in key Chinese markets, with many expressing a lack of understanding and concerns about compliance and costs [1][2]. Group 1: Merchant Awareness and Usage - Most merchants in Yiwu and Shenzhen are unaware of stablecoins, with only a few expressing interest in using them for transactions [1][2]. - A small number of merchants indicated they might consider using stablecoins for international payments, but none reported having completed such transactions [2]. - Merchants primarily rely on traditional payment methods like cash and Alipay for foreign transactions, with one merchant mentioning a recent $30,000 transfer via Alipay [2]. Group 2: Stablecoin Characteristics and Market Dynamics - Stablecoins, such as USDT, are pegged to fiat currencies, providing a more stable alternative compared to other cryptocurrencies [1][4]. - The market for stablecoins has gained traction globally, particularly following legislative progress in the US and Hong Kong [1]. - The exchange process for stablecoins involves "U merchants" who facilitate the conversion between stablecoins and fiat currencies, often charging fees and setting minimum transaction amounts [3]. Group 3: Regulatory and Compliance Issues - The use of stablecoins for cross-border payments in China faces significant regulatory challenges, as current laws prohibit the use of virtual currencies for such transactions [4][5]. - Legal experts emphasize that while personal trading of virtual currencies may be permissible, using them for business transactions is fraught with compliance risks [5].