China Weighs Yuan-backed Stablecoins as Part of Currency Internationalization Push

China is moving closer to launching yuan-backed stablecoins as part of its strategy to strengthen the global role of its currency.

According to Reuters, the State Council will review a roadmap later this month that assigns regulatory responsibilities, establishes risk controls, and directs the People’s Bank of China to lead implementation. Initial pilots are expected in Hong Kong and Shanghai.

This would mark a significant shift from China’s 2021 ban on crypto trading and mining. Instead of focusing on decentralized digital assets, Beijing is now exploring how stablecoins tied to the yuan could support cross-border payments and reduce reliance on the U.S. dollar. Currently, dollar-backed tokens account for over 99% of the world’s stablecoin supply, underscoring Washington’s dominance in digital settlements.

The roadmap will also define limits for commercial use, ensuring that yuan-backed stablecoins are integrated into financial markets without undermining state control. Further discussions on international trade use are expected during the Shanghai Cooperation Organization summit in Tianjin, scheduled from August 31 to September 1.

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China’s consideration of stablecoins reflects a broader ambition: building a digital financial infrastructure that expands the yuan’s reach in global trade while challenging dollar dominance in both traditional and blockchain-based systems.