China Weighs Yuan-Backed Stablecoins to Boost Currency’s Global Use

China’s government is considering permitting the use of yuan-backed stablecoins for the first time, people familiar with the matter told Reuters, signalling a sharp turn in Beijing’s stance on digital assets. The initiative is part of a broader roadmap to expand the renminbi’s international role and is expected to be reviewed by the State Council later this month.

Draft plans seen by the sources would assign regulatory duties to the People’s Bank of China and call for pilot projects in Hong Kong and Shanghai, which have recently put stablecoin licensing rules in place. Officials also aim to present the topic at the Shanghai Cooperation Organisation summit in Tianjin on 31 August–1 September as they seek partners for cross-border trade and payment trials.

Beijing views stablecoins as a tool to counter the dominance of U.S. dollar-linked tokens, which make up more than 99 percent of the roughly US$247 billion global stablecoin market. The yuan accounted for just 2.88 percent of global payment flows in June, compared with 47.19 percent for the dollar, according to SWIFT data. Allowing a yuan-pegged token would mark China’s biggest policy reversal since its 2021 ban on cryptocurrency trading and mining.

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