August 22, 2025
By Anjali Kochhar
In a move that could shake up the currency world, China is preparing to unleash yuan backed stablecoins and finally give the dollar a real run for its money.
China’s State Council is reportedly ready to roll out a bold roadmap later this month to accelerate the yuan’s role on the global stage. Central to the plan is the authorisation of yuan backed stablecoins, digital tokens tied directly to the Chinese currency, marking a significant pivot from its past rejection of crypto innovations.
After banning cryptocurrency trading and mining in 2021 to safeguard financial stability, Beijing now appears to be embracing a new digital era. The upcoming plan is expected to outline global usage targets for the yuan, clarify domestic regulators’ responsibilities, and provide guidelines to mitigate risks. Senior leadership is set to convene at the end of the month to study and guide this shift, potentially delivering key messaging on stablecoin boundaries and business applications.
This strategic turn is also being pushed forward by regional financial hubs. Hong Kong and Shanghai are preparing to fast track implementation of the plan. Hong Kong recently enacted a stablecoin ordinance effective from August 1, making it one of the first places to regulate fiat backed stablecoin issuers. At the same time, Shanghai is positioning itself as an international hub for digital yuan operations.
The backdrop of this move is the overwhelming dominance of the US dollar. In June, the yuan’s share of global payments slipped to just 2.88 percent, its lowest in two years, while the dollar commanded a staggering 47.19 percent market share. Stablecoins may seem like a small slice of the pie today, with a market size of about 247 billion dollars, but industry projections suggest this figure could skyrocket to 2 trillion dollars by 2028.
Adding urgency to the effort, China plans to push the conversation on yuan usage at the upcoming Shanghai Cooperation Organisation Summit in Tianjin from August 31 to September 1. Discussions may include not only the yuan’s role in cross border trade but also how stablecoins could enhance its acceptance.
As China stands on the edge of a digital currency revolution, the world is left asking: will yuan backed stablecoins truly ignite a shift in financial power or remain another passing experiment? The answer depends on how seamlessly innovation can meet regulation and whether this digital gamble can chip away at dollar dominance.
About the author
Anjali Kochhar covers cryptocurrency and blockchain stories in India as well as globally. Having been in the field of media and journalism for over four years now, she has developed a sharp news sense and works hard to present information that goes beyond the obvious. She is an avid reader and loves writing on a wide range of subjects.
