China’s First CBDC Oil Purchase Is a Warning for Crypto
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| By Beth Canova |
A new year means new beginnings. And China wasted no time in getting started.
We’re barely a week into 2026, and it has changed the game with a new “first.” And it’s a big one.
It used its digital yuan to buy crude oil.
China has been buying oil using its yuan, rather than U.S. dollars, since 2023. But this marked the first time it used its own Central Bank Digital Currency to do so.
The ramifications of this move will ripple through multiple markets. But we’ll likely see the first impacts hit right at home on the blockchain.
It Starts with Stablecoins
In crypto, there’s one powerful trend that’s unlikely to hit the brakes any time soon: stablecoins.
Thanks to new regulatory frameworks like the GENIUS Act in the U.S. and the MiCA framework in the EU, stablecoins — digital assets pegged 1-to-1 to a fiat currency, usually USD — have broken blockchain containment.
Many TradFi firms have jumped on the chance to benefit from the instant and always-on nature of the blockchain while still staying in the realm of fiat-backed currency.
Even accounting giant PwC — which has remained notably cautious regarding all crypto assets — believes that stablecoins will help improve payments and cross-border transactions.
The stablecoin sector is currently valued at around $280 billion, and the U.S. Treasury believes it could grow to $3 trillion by 2030.
That’s growth you’ll want in on.
But as investors, it’s paramount that you remember one key truth …
Not All Stablecoins Are Equal
Yesterday, DeFi expert Marija Matic highlighted this point brilliantly when she told you about yieldcoins.
Think of them like super stablecoins. Not only do they bring your dollars onto the blockchain. They also allow you to earn a passive yield by simply holding the coins.
But there are other stable digital assets that have a few more strings attached.
I’m talking, of course, about Central Bank Digital Currencies, or CBDCs. They’re pegged 1-to-1 to a fiat currency.
Nearly 93% of banks have been exploring their own CBDCs since 2022, according to a Bank of International Settlements survey. And 60% of those surveyed say that the rise and expansion of stablecoins in general have fueled this push.
At the time of writing, only a handful have actually launched.
But China’s latest move could be the start of a more determined effort for others to roll out their own CBDCs. Because its purchase of crude oil with its digital yuan confirms the utility of CBDCs on a global scale.
Other nations — especially those weary of the dollar’s dominance in light of the U.S. freezing Russian-held USD — are paying close attention.
But for crypto enthusiasts, there’s a catch: Unlike stablecoins, CBDCs come with central bank control … just like their fiat counterparts.
The entire ethos of cryptocurrencies is that they are decentralized and beyond the reach of government control. While on the blockchain, CBDCs betray that principle.
They give control right back to the same authorities that crypto was created to escape.
My colleague, income specialist Nilus Mattive, explained brilliantly why this is a concern just yesterday:
From where I sit, central banks cause more problems than they solve.
Rather than letting market dynamics work naturally, they try to manage things as they see fit … often times rewarding big financial firms at the expense of the common man.
Essentially, they favor the system over the people.
This is not surprising since there has always been a revolving door between Wall Street and the Fed. (And the same goes for the U.S. Treasury.)
I could go on at length about the number of policy mistakes central bankers have made in the modern era and how much damage they’ve caused.
Suffice it to say, we’ve seen several major asset bubbles just since the year 2000 — and all of them were caused to some large degree by reckless monetary policy.
Same with inflation. You need only look at your grocery bill or think about what you used to pay for a gallon of gas when you first started driving as a gentle reminder.
Central bankers aren’t stupid, mind you.
The problem, as I just mentioned, is that they are deeply entrenched in the financial system.
They are supposedly independent operators. But, philosophically, they are still bankers who work at the behest of the government.
Take the latest Fed decision to cut rates.
With inflation still running substantially higher than the Fed’s stated objective, but the labor market also starting to show some signs of cooling, the vast majority of FOMC voting members opted to cut rather than hold steady.
The message was clear: They’d rather risk even more inflation … and keep pumping up already-overheated assets like stocks … than see the economy weaken at all.
This is the same choice the Fed makes every single time it is faced with such a dilemma.
It’s the same choice many central banks make.
In fact, Bob Czeschin recently laid out three big reasons why he expects the People’s Bank of China to turn its printing presses on high in 2026.
And that inflation will spread to its shiny, new digital currency, as well.
Go for Stablecoins, Not CBDCs
So, how can you hitch your portfolio to the growing stablecoin market without muddying the waters and risking your wallet by holding a CBDC?
With careful research.
The simple place to start if you’re looking to digitize your dollars is with USD Coin (USDC) or Tether (USDT), two of the largest stablecoins in circulation.
You can also use these within DeFi to lend, borrow or stake to earn yield.
If you want your stablecoins to work hard while you relax, I suggest checking out which yieldcoins Marija recommends for your watchlist.
With these, there’s no action required to earn yield. Just buy, hold and watch the value increase.
Finally, you can invest in the projects that offer yieldcoins and stablecoins — like Ondo Finance (ONDO, “C”) or Sky Protocol (SKY, “C”) — if a higher risk/reward profile is more your speed.
Best,
Beth Canova
Crypto Managing Editor
