Yiwu stablecoin payment investigation: rumors are greatly exaggerated, in reality only a few merchants are using it.

According to the 21st Century Business Herald, the popularity of stablecoins remains high, and the focus is gradually shifting towards practical application scenarios. Recently, there have been market reports that Yiwu has cases of accepting stablecoin payments for foreign trade goods, making it a focal point of attention once again.

According to a research report by Huatai Securities, "In Yiwu, the world's small commodity center in China, stablecoins have become an important tool for cross-border payments. Blockchain analysis firm Chainalysis estimates that in 2023, the on-chain stablecoin flow in the Yiwu market will exceed 10 billion USD." Some people have also posted online, stating, "Over 3,000 merchants in Yiwu are already using USDT and other stablecoins for payments, with monthly transaction volumes exceeding 1 billion USD, directly saving nearly 10 million RMB in transaction fees!"

So, what is the actual situation of stablecoin usage in Yiwu? To get to the bottom of this, a reporter from the 21st Century Business Herald delved into Yiwu and conducted an on-the-ground investigation of the stablecoin usage situation:

Key Findings:

• Data distortion circulating online: Statements such as "monthly turnover of 1 billion dollars", "over 3000 merchants using", and "annual turnover exceeding 10 billion dollars" do not match the facts.
• Low merchant awareness: Journalists visited Yiwu International Trade City, and the vast majority of merchants are unaware of or have never heard of stablecoins (USDT/USDC).
• Willingness to use is extremely low: Only a very few merchants indicated they accept stablecoin payments. Merchants are generally concerned about compliance (“Will my card be frozen?”) and exchange costs (“The costs are too high”).
• Official denial from the company: The listed company Xiaogoods City (600415) clearly stated "has not grasped the usage of stablecoin in the Yiwu market and related data".

The core reason for the obstacles in stablecoin implementation:

1. Export Tax Refund Policy Benefits: Traditional payment methods can enjoy export tax refunds (the refund amount in Yiwu reached 12.071 billion yuan in 2023), with a refund rate of 6%-13%, constituting an important profit point. Payments in stablecoins cannot receive tax refunds.
2. Corporate Financing Demand: Traditional payment data such as bank statements are the key basis for enterprises to obtain bank loans and also the deciding factor for the scale of booth applications for large exhibitions (such as the Canton Fair). Stablecoin transactions cannot provide these credentials.
3. Implicit Costs and Risks:
   • Exchange Cost: It is necessary to exchange fiat currency through the "U Merchant" intermediary, which incurs significant price difference losses (e.g., 0.98 buy / 1.03 sell, about 3%-5% cost).
   • Frozen Card Risk: The risk of bank accounts being frozen due to suspected money laundering is extremely high, affecting operations.
   • Operation Threshold: Requires managing a virtual currency wallet, the process is complex.

Theoretical Advantages of Stablecoins VS Reality in Yiwu:

• Theoretical Advantage: Fast cross-border transfers (about 2 minutes), low fees.
• Yiwu Reality: The U-commerce exchange link offsets speed advantages, exchange costs and frozen card risks erode fee advantages. Traditional payment (2-3 working days) is slow but safe, reliable, and enjoys policy dividends.

Future Trends:

• The cross-border payment platform "Yiwu Pay" under the small commodity city is currently following the Hong Kong stablecoin regulatory framework and has stated that it will actively evaluate the application for a Hong Kong stablecoin license once the regulations are clarified.

Summary:

1. Data is severely exaggerated: Yiwu stablecoin payments have yet to scale, the actual number of users is very few.
2. Core Obstacles Difficult to Resolve: Export Tax Rebate Policy and Enterprise Financing/Booth Demand are the core advantages of traditional payment that cannot be replaced.
3. Risk outweighs advantages: Frozen card risks and exchange costs make merchants actively avoid stablecoins.
4. Breaking the deadlock depends on regulation: The ability to promote in the future depends on whether compliant platforms like "义支付" can obtain licenses (such as in Hong Kong) and address core pain points like tax refunds and financing.