China is considering authorizing the launch of yuan-backed stablecoins for the first time, signaling a dramatic departure from its previous hardline stance on digital assets. According to sources cited by Reuters, the State Council will review a roadmap later this month that sets targets for yuan adoption in global markets, outlines regulatory responsibilities, and lays down risk-prevention guidelines.
The plan reflects Beijing’s long-standing ambition to elevate the yuan to global currency status comparable to the dollar or euro. However, tight capital controls and large trade surpluses have so far hindered its internationalization—factors that could also complicate stablecoin deployment.
Stablecoins, digital tokens pegged to fiat currencies, have become increasingly vital in global finance, enabling low-cost, round-the-clock transfers. At present, U.S. dollar-backed stablecoins account for over 99% of the $247 billion global market, according to the Bank for International Settlements. Analysts predict this figure could soar to $2 trillion by 2028.
If Beijing proceeds, it would mark a major reversal of its 2021 ban on cryptocurrency trading and mining, imposed due to concerns over financial stability and capital flight. To manage risks, China is expected to move cautiously, beginning with pilot rollouts in Hong Kong and Shanghai. Hong Kong has already introduced a stablecoin ordinance this month, while Shanghai is positioning itself as an international hub for the digital yuan. An offshore yuan-backed stablecoin in Hong Kong is also under discussion, according to PBOC adviser Huang Yiping.
The move comes against the backdrop of intensifying geopolitical competition with Washington. U.S. President Donald Trump has openly endorsed stablecoins and is advancing regulations to entrench the dollar’s dominance in the sector. China, in response, plans to spotlight yuan-based stablecoins at the upcoming Shanghai Cooperation Organisation (SCO) Summit in Tianjin, where their potential role in cross-border trade and payments will be debated.
