Finance – EIAS

EU-China Trade: Facilitating Bilateral Trade Through a Joint Fiat-Backed Stablecoin

This EIAS Briefing Paper explores the implementation of a joint, fiat-backed stablecoin as a tool for facilitating EU-China Trade, which reached a valuation of approximately 762 billion USD in 2024. Despite the high volume of Bank-to-Bank (B2B) transactions, bilateral trade remains tethered to inefficient financial infrastructure characterised by high foreign exchange (FX) markups, third-party reliance, and settlement latencies. These frictions impose systemic costs and lock up billions in working capital. This paper proposes a private fully-collateralised stablecoin pegged to a 50/50 basket of the Euro (EUR) and Offshore Renminbi (CNH). Blockchain architecture and smart contract automation offers the potential of near-instantaneous completely transparent settlement and reductions in transaction costs to a fraction of traditional transfers.

Chinese Banks in the EU: Structures, Functions and Regulatory Challenges

Chinese banks have established themselves in the European Union as key players in financing trade, investment, and business activities between Europe and China. Their special institutional structure in the form of the ‘branch-cum-subsidiary’ model, often established in Luxembourg, allows for high financial flexibility, but also brings regulatory tensions. At the same time, new European regulations on banking supervision, investment control, and economic security are changing the framework of their activities within the union. This leads to challenges and new requirements for a balanced and reciprocal design of EU-China financial relations.