China is considering introducing yuan-backed stablecoins in a bid to boost the global use of its currency, marking a major policy shift from its longstanding skepticism toward digital assets, sources familiar with the matter said.
The State Council, China’s cabinet, is expected to review and possibly approve a new yuan internationalisation plan later this month. The roadmap would set targets for global yuan usage, assign regulatory responsibilities, and provide guidelines for managing risks, the sources said.
The move comes as stablecoins, cryptocurrencies pegged to fiat currencies, gain ground worldwide, with U.S. dollar-backed tokens accounting for more than 99% of global supply, according to the Bank for International Settlements. Washington, under President Donald Trump, has already laid out a regulatory framework to bolster dollar-pegged stablecoins.
If adopted, China’s plan would represent a sharp reversal from its 2021 ban on cryptocurrency trading and mining. Officials are expected to convene a high-level study session this month to define the role of stablecoins in business and set the tone for their development.
Hong Kong and Shanghai have been identified as the primary hubs for fast-tracking local implementation. Hong Kong’s new stablecoin ordinance, effective August 1, already makes it one of the first global markets to regulate fiat-backed issuers, while Shanghai is building an international operations center for the digital yuan.
China is also expected to push for broader yuan adoption – including stablecoin use in cross-border trade – during the Shanghai Cooperation Organisation (SCO) Summit in Tianjin on August 31–September 1, the sources said.
Despite being the world’s second-largest economy, China’s currency accounted for just 2.88% of global payments in June, its lowest in two years, compared to the U.S. dollar’s 47.19%, according to SWIFT. Analysts warn that Beijing’s strict capital controls could complicate the rollout of yuan-backed stablecoins, even as Chinese exporters increasingly rely on dollar-based tokens.
The global stablecoin market, currently valued at about $247 billion, could grow to $2 trillion by 2028, according to Standard Chartered. Beijing views financial innovation, particularly stablecoins, as a potential tool to challenge U.S. monetary dominance and accelerate yuan internationalisation.
The State Council Information Office and the People’s Bank of China did not immediately respond to requests for comment.
Written By Rodney Mbua
