China weighs Yuan-backed stablecoins in push to boost global currency role
China is considering allowing yuan-backed stablecoins for the first time, marking a major policy shift aimed at promoting international use of its currency.
The State Council is expected to review and possibly approve a roadmap later this month to accelerate yuan internationalisation. The plan will include adoption targets, regulatory duties, and risk-control guidelines, News.Az reports, citing Reuters.
If approved, Hong Kong and Shanghai would be the first to fast-track implementation, with Hong Kong’s new stablecoin ordinance already in effect since Aug. 1.
The move would be a sharp reversal from Beijing’s 2021 ban on cryptocurrency trading and mining. It comes as U.S. dollar-backed stablecoins dominate the market, accounting for more than 99% of supply, and as Washington under President Trump pushes to formalise a framework for dollar-linked tokens.
China has long sought to expand the yuan’s global footprint, but tight capital controls have limited progress. A stablecoin could help exporters and trading partners use yuan more seamlessly in cross-border deals, potentially reducing reliance on the dollar.
The issue will be on the agenda at the Shanghai Cooperation Organisation (SCO) summit in Tianjin (Aug. 31–Sep. 1), where Beijing is expected to push for broader use of yuan in trade settlements.
The global stablecoin market is valued at about $247 billion, but could reach $2 trillion by 2028, according to Standard Chartered.
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