China Weighs Launch of Yuan-Backed Stablecoin, Adding New Option to Global Monetary System?

TradingKey - According to Reuters sources, China is considering permitting its first renminbi-backed stablecoin applications to promote broader global adoption of its currency—a potential major shift in its regulatory stance toward digital assets following the 2021 crackdown on cryptocurrency trading and mining.

Sources indicate China’s State Council plans to review and possibly approve a yuan internationalization roadmap later this month, including measures to catch up with U.S. stablecoin initiatives while emphasizing risk prevention and regulatory coordination.

Senior leadership is expected to convene a specialized study session as early as late this month, focusing on the internationalization of the yuan and global trends in stablecoins. The meeting may clarify stablecoin positioning, commercial use cases, and regulatory red lines to establish policy foundations for subsequent pilots.

In Asia, South Korea has passed legislation allowing won-backed stablecoin issuance and infrastructure development, while Japan advances related pilot projects.

Sources revealed Hong Kong—China’s special administrative region—and Shanghai may become primary hubs for implementing the renminbi stablecoin plan. Huang Yiping, an advisor to the People’s Bank of China, recently stated in an interview that launching an offshore renminbi stablecoin in Hong Kong is "feasible."

Analysts note that with dollar-backed stablecoins (USDT, USDC) dominating the global market, a yuan stablecoin would represent a critical step for China to reduce reliance on traditional dollar-clearing systems and advance "de-dollarization." Particularly under the Belt and Road Initiative framework, yuan stablecoins could significantly enhance cross-border trade payment efficiency, mitigate currency volatility impacts on businesses, and provide partner nations with diversified settlement options—accelerating the renminbi’s internationalization.