(Yicai) July 11 -- Vendors in the Yiwu International Trade Market, the world's largest wholesale market for small commodities, have told Yicai that rumors claiming they have been widely using stablecoins to settle cross-border payments are false.

“Almost no factories or foreign trade companies around us use stablecoins for transactions,” said Yuan Haotian, general manager of Superb Group, which has a shop in the market.

The issuance, trading, and exchange of all cryptocurrencies and stablecoins, which are a type of cryptocurrency, is banned in the Chinese mainland.

According to rumors, a research report by blockchain data platform Chainalysis showed that the use of stablecoins in trans-border payments at the Yiwu International Trade Market had exceeded USD10 billion since 2023. A search for the report turned up empty, so Yicai was unable to verify the source of the data.

Stablecoins are designed to maintain a stable value by being pegged to a reserve asset, usually a fiat currency such as the US dollar or a commodity like gold. They aim to offer the price stability of traditional money while retaining the efficiency and decentralization of digital currencies.

“In reality, the use of stablecoins for payment is still a marginal phenomenon in Yiwu, and only a few pioneering merchants adopt it,” a source at a blockchain exchange told Yicai.

Most Yiwu merchants have not used stablecoins, mainly because their European and American customers are not willing to use them, Yuan pointed out. Even though stablecoins are pegged one-to-one to the US dollar, they still carry risks for companies, so the dollar remains the main payment currency, with some European clients preferring the euro, he added.

Telegraphic transfers and letters of credit are the payment methods foreign trade companies usually use, Yuan noted, adding that almost all of them have overseas bank accounts, so their primary and preferred trading currency remains the US dollar. Other methods include LianLian Pay, PingPong, Airwallex, and Payoneer Global, he added.

CNY800 million (USD111.6 million) worth of small goods ranging from toys and electronics to cosmetics and holiday decorations are sold at the market on average each day.

“Our company accepts payments through LianLian, PingPong, or Yiwu Pay -- the Yiwu International Trade Market's own payment tool -- and sometimes offshore bank transfers, mainly settled in US dollars,” the GM of Yiwu Inngar Trade told Yicai.

“Using stablecoins requires converting them into fiat currencies, which may result in issues such as anti-money laundering reviews,” she said.

Editors: Tang Shihua, Futura Costaglione