(Yicai) July 11 -- Multiple merchants in Yiwu, the Chinese city known as the world's small goods capital, have told Yicai that rumors claiming they have been using stablecoins to settle cross-border payments are false.

"Almost no factories or foreign trade companies around us use stablecoins for transactions," Yuan Haotian, general manager of Superb Group, which has a store in the Yiwu International Trade Market, told Yicai.

According to recent rumors, a research report from blockchain data platform Chainalysis showed that the total use of stablecoins in cross-border payments in the Yiwu International Trade Market had exceeded USD10 billion since 2023. However, Yicai could not find the report.

The mainstream payment methods for foreign trade firms are telegraphic transfers and letters of credit, Yuan noted, adding that almost all of them have overseas bank accounts, so their primary and preferred trading currency remains the US dollar.

Other cross-border payment methods include LianLian Pay, PingPong, Airwallex, and Payoneer Global, Yuan said.

"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."

A key reason most merchants in Yiwu do not use stablecoins is that their European and American customers have no such intention, Yuan pointed out. Even though stablecoins are pegged one-to-one to the US dollar, they still carry risks for companies, so the US dollar remains the main payment currency, with some European customers preferring the euro, he added.

"The use of stablecoins for payments remains a marginal phenomenon in Yiwu, as it is adopted only by a handful of radical-minded merchants," an insider from a blockchain exchange platform told Yicai.

The Yiwu International Trade Market, the world's largest small commodity wholesale market, has an average daily transaction volume of over CNY800 million (USD111.6 million).

Editors: Tang Shihua, Futura Costaglione