China is preparing its first foray into yuan-backed stablecoins, aiming to expand the global footprint of its national currency through digital assets.
Sources say the State Council will meet this month to finalise a roadmap for wider usage of the yuan in global markets, drawing lessons from U.S. stablecoin frameworks and Hong Kong’s recently enacted stablecoin ordinance. The plan is expected to set clear goals for offshore and onshore usage, designate roles for the People’s Bank of China and other domestic regulators, and outline risk-prevention measures.
Hong Kong and Shanghai are slated to lead pilot implementations, leveraging existing financial infrastructure and digital yuan experience. Hong Kong’s ordinance, effective August 1, has already licensed several issuers under a ‘same activity, same rules’ principle. Shanghai’s digital yuan operations center will integrate stablecoins into cross-border trade corridors.
By enabling yuan-pegged tokens, Beijing hopes to counter U.S. dollar-linked stablecoins that command over 99% of the global market. The initiative aligns with China’s long-standing ambition for reserve currency status, though capital controls and compliance requirements remain key hurdles. Policymakers plan to discuss stablecoin use, among other yuan internationalisation topics, at the Shanghai Cooperation Organisation summit in late August.
Implementation details will likely emerge in coming weeks, as authorities balance financial stability concerns with the need for digital innovation. If approved, the stablecoin roadmap would represent a major policy shift from 2021’s blanket ban on crypto trading and mining, signaling China’s willingness to adopt digital asset tools in pursuit of greater currency influence.
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