China Mulls Yuan-Backed Stablecoin As Beijing Makes A Play Against US Dominance

China is reportedly considering allowing the use of yuan-backed stablecoins for the first time.

The yuan stablecoin roadmap is expected to be discussed at the Shanghai Cooperation Organisation (SCO) Summit in Tianjin later this month. At the summit, China will promote the wider use of its currency in trade settlements.

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China is Considering Yuan-Backed Stablecoin

According to Reuters, the State Council will review a roadmap later this month to expand yuan internationalisation, including stablecoin pilots in Hong Kong and Shanghai.

If approved, the plan would establish regulatory guidelines, risk controls, and usage targets to counter the overwhelming dominance of US dollar–pegged tokens.

[ ZOOMER ]

CHINA CONSIDERING EXPANDING USE OF YUAN INTO STABLECOIN, TO DISCUSS AT SHANGHAI SUMMIT THIS MONTH: RTRS

— zoomer (@zoomerfied) August 20, 2025

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China’s move comes as Washington races ahead on stablecoin regulation under President Trump, seen with the GENIUS Act. Dollar-backed coins are cementing their role in crypto trading and cross-border payments.

Stablecoins are digital tokens designed to maintain a constant value, usually pegged to a fiat currency.

The global market is currently worth around $276 billion, with more than 99% pegged to the US dollar, according to DefiLlama data.

Hong Kong and Shanghai in the Spotlight

Implementation will be fast-tracked in Hong Kong, which rolled out its long-awaited stablecoin ordinance on August 1, and Shanghai, which is building an international hub for digital yuan operations.

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Both cities are expected to play a critical role in deploying offshore yuan-denominated stablecoins.

Analysts see the initiative as part of Beijing’s broader push to counter US financial hegemony. Chinese exporters are already using dollar stablecoins at scale, a trend that highlights the yuan’s limited reach in global payments

If adopted, the decision would mark the biggest reversal since Beijing’s 2021 ban on crypto trading and mining.

While capital controls remain a structural hurdle, yuan-backed stablecoins could give China new leverage in global finance.

The influence could be particularly pronounced in Asia, where Japan and South Korea are also moving forward with fiat-backed token pilots.

More details are expected as Chinese policymakers finalize consultations.