China is considering greenlighting yuan-backed stablecoins to help boost the currency’s international use, signaling a major shift in its approach to digital assets, according to sources. China’s cabinet is expected to review a plan this month to boost the yuan’s global presence, including steps to keep pace with U.S. progress on stablecoins, sources said.
The roadmap is expected to set goals for using the yuan in global markets, define the roles of local regulators, and include risk management guidelines, sources said. China’s senior leaders are expected to meet this month to discuss expanding the yuan’s global use and the growing importance of stablecoins, a source said.
At the meeting, top leaders are likely to provide guidance and define rules for how stablecoins can be used and developed, a source said. If approved, China’s stablecoin plan would represent a major shift, overturning its 2021 ban on crypto trading and mining over financial concerns.
China has aimed for the yuan to join the dollar and euro as a global currency, but tight capital controls and large trade surpluses have limited its progress.Industry insiders say these rules will continue to block stablecoin development.
The yuan’s share of global payments dropped to 2.88% in June, its lowest in two years, while the U.S. dollar led with 47.19%, SWIFT data shows. China’s tight capital controls limit currency flow, with limited offshore access via Hong Kong connect programs.
Soon after taking office, President Trump backed stablecoins and pushed for rules to legitimize dollar-backed crypto, which offer fast, low-cost, borderless payments with blockchain technology.
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According to sources, Beijing views stablecoins and financial innovation as important tools to strengthen the yuan’s international presence amid the growing influence of U.S. dollar-linked cryptocurrencies.
