The People’s Republic of China is considering the possibility of launching a yuan-based stablecoin as a first step towards promoting its currency globally. China’s cabinet, the State Council, is expected to review this stance and approve a roadmap in the later part of August to compete with the present U.S. domination.
If approved, then this shift would be in sharp contrast to the previous stance of China against digital assets. Previously, in 2021, the Red Dragon had banned both cryptocurrencies and their mining, citing financial risks.
As per a latest report from Reuters, citing anonymous sources, Shanghai and Hong Kong would be first cities for a potential rollout if authorized. Besides, Hong Kong’s new stablecoin ordinance came into force from August 1, and Shanghai is building a center for digital yuan.Â
Yuan’s Position in Global Payments
According to SWIFT data, the yuan’s share in global payments fell to 2.88% in June, its lowest in two years, while the U.S. dollar accounted for 47.19%. The dominance for dollar seems viable with the U.S. President Donald Trump constantly backing stablecoins from the day of his inauguration in January. With bills like the GENIUS Act, the U.S. is also establishing a regulatory framework that helps legitimize dollar-pegged cryptocurrencies.
Sources who wished to be unnamed, as they are not authorized to talk to the media, told Reuters that exact details of the plan are expected to be unveiled in the coming weeks, with Chinese regulators, including the central bank, the People’s Bank of China (PBOC), being assigned implementation duties.
The developments will also be discussed at the upcoming SCO summit in Tianjin, on August 31 to September 1, 2025, with heads of state of other member countries, including India and Pakistan.Â
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