August 26, 2025
By Anjali Kochhar
In a striking departure from its previous hardline stance, China is internally debating the introduction of yuan backed stablecoins to facilitate cross border trade, signaling a renewed push to elevate the renminbi’s role on the global stage.
According to people familiar with the matter, China’s State Council, its cabinet, is scheduled to review a roadmap later this month that includes targets for expanding the yuan’s usage internationally, responsibilities for domestic regulators, and comprehensive risk management guidelines.
A study session among senior officials is expected by the end of August, during which leadership will define the permissible scope and business applications of stablecoins within the broader framework of renminbi internationalisation.
The move represents a sharp reversal from Beijing’s digital asset policy stance. In 2021, China banned cryptocurrency trading and mining amid concerns over financial stability. Stablecoins, digital assets pegged to fiat currencies like the dollar, now dominate global crypto markets, including in areas of trade where Chinese exporters are increasingly active.
China’s motivation is clear. It aims to bolster the yuan’s global profile amid U.S. dominance. The renminbi’s share of worldwide payments hit a two year low of just 2.88 percent in June, while the U.S. dollar maintained a commanding 47.19 percent share, according to SWIFT data.
Hong Kong and Shanghai are expected to play leading roles in testing and rolling out offshore yuan backed stablecoins, leveraging regulatory progress and emerging infrastructure. Hong Kong implemented its stablecoin ordinance on August 1 and could begin issuing licenses to regulated issuers by early 2026. Shanghai, meanwhile, continues to advance its international digital yuan efforts, including the establishment of an operations center for e CNY.
Nonetheless, China remains cautious. Policymakers are wary of capital flight, money laundering, and the difficulty of maintaining control over decentralized stablecoins. Hong Kong regulators indicated they will issue only a limited number of licenses initially, and with stringent oversight in place.
China’s state owned enterprises and major banks have already shown keen interest in leveraging stablecoins for trade finance and settlement. Yet despite the ambitious policy shift, domestic constraints including capital controls and trade surplus pressures could limit initial adoption.
The unfolding roadmap could be unveiled in the coming weeks, with regulators such as the People’s Bank of China playing central roles in implementation. As pressure mounts to counter U.S. dollar dominance, China may also raise the topic at the Shanghai Cooperation Organisation Summit on August 31 to September 1, positioning yuan backed stablecoins as a potential tool in its international finance toolkit.
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.
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