Key Takeaways
- Beijing is considering yuan-backed stablecoins for the first time, marking a major reversal from its 2021 ban on crypto trading and mining.
- The U.S. leads the global stablecoin market, with 99% pegged to the dollar and total value doubling to $250 billion in just 18 months.
- As Chinese exporters increasingly use dollar-backed stablecoins, Beijing is hoping a yuan-backed alternative will strengthen the yuan’s global role.
China is reportedly exploring the use of yuan-backed stablecoins for the first time, as the U.S. continues to dominate the rapidly growing digital asset market.
The move marks a dramatic reversal of Beijing’s stance on cryptocurrency, after the country banned crypto trading and mining in 2021.
China’s Yuan-Backed Stablecoin Exploration
On Wednesday, August 20, Reuters reported that China’s cabinet may approve a roadmap later this month to catch up with the U.S. in stablecoins.
According to Reuters, citing people familiar with the matter, government leaders in Beijing are scheduled to attend an education session focused on stablecoins.
The meeting is expected to outline the potential use cases for the yuan-backed stablecoin and include measures for risk prevention, Reuters reported.
The Rise of Stablecoins in the U.S.
President Donald Trump has made the regulation and promotion of stablecoins, as well as the broader crypto industry, a key focus of his presidency since his inauguration in January.
Stablecoins, 99% of which are pegged to the U.S. dollar, have already doubled in market value to $250 billion from $120 billion 18 months ago, according to McKinsey & Company.
The asset class is forecast to exceed $400 billion by the end of 2025 and reach $2 trillion by 2028.
Leveraging blockchain technology, stablecoins enable instant, borderless fund transfers at extremely low costs, representing major improvements over traditional banking systems.
“In 2025, we believe that every institution that moves money will need a stablecoin strategy,” said Godfrey Sullivan, Visa’s Senior Vice President for CEMEA.
China Forced to Play Catch-Up
As Chinese exporters increasingly adopt dollar-backed stablecoins amid rising tensions between Beijing and Washington, China’s potential yuan-backed stablecoin pivot comes at a critical juncture.
Exploring yuan-backed stablecoins suggests that the government is considering whether a parallel track with the U.S. could accelerate the yuan’s international use.
Unlike decentralized cryptocurrencies, yuan-backed stablecoins would remain fully under government oversight.
This allows China to experiment with blockchain-based payments while maintaining capital controls and minimizing financial risks.
However, even as Beijing signals greater openness, the roadmap under discussion is still expected to emphasize strict regulatory boundaries.
China’s Global Currency Ambitions
For years, China has aspired to elevate the yuan to the same global status as the dollar or euro. However, strict capital controls have prevented the currency from achieving that role.
China has long pursued its own central bank digital currency (CBDC), the digital yuan, while maintaining firm bans on private cryptocurrencies.
The potential move toward a yuan-backed stablecoin follows a recent interview with People’s Bank of China advisor Huang Yiping, who noted that an offshore yuan stablecoin in Hong Kong is “a possibility.”
This development coincides with Hong Kong’s new stablecoin regulation, which came into effect at the beginning of the month, making the Chinese-controlled territory one of the first markets globally to regulate fiat-backed stablecoin issuers.
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Kurt Robson is a London-based reporter at CCN, specialising in the fast-moving worlds of crypto and emerging technology. He began his career covering local news in Cornwall after graduating from Falmouth University with First Class Honours in Journalism. There, he cut his teeth on everything from council meetings to missing swans.
He quickly rose through the ranks to become a frontline journalist at several of the UK’s leading national newspapers. Over the years, he has interviewed musicians and celebrities, reported from courtrooms and crime scenes, and secured multiple front-page exclusives.
Following the upheaval of the COVID-19 pandemic, Kurt shifted his focus to technology journalism—just ahead of the AI boom. With a natural curiosity and a trained eye for emerging trends, he has found a new rhythm in reporting on innovation.
At CCN, Kurt's work focuses on the cutting edge of crypto, blockchain, AI, and the evolving digital world. Drawing on his background in people-first reporting and his deep interest in disruptive tech, Kurt delivers stories that are insightful, entertaining, and human-centric.
