Yuan-Pegged Stablecoins Set to Disrupt Markets as Beijing Shifts Crypto Strategy

Beijing's policy pivot unleashes yuan-backed digital assets onto global markets—just as traditional finance scrambles to keep pace.

The Digital Yuan Goes Global

China's central bank digital currency breaks containment, fueling a new wave of stablecoin innovation that could reshape cross-border transactions. Private issuers now rush to launch CNY-pegged tokens, bypassing legacy banking channels entirely.

Wall Street's New Headache

Traditional FX traders face obsolescence as algorithmic stablecoin arbitrage eats into spreads—because nothing disrupts like a government-backed asset that actually works. Meanwhile, hedge funds quietly accumulate positions, betting that Beijing's approval signals deeper crypto integration ahead.

Regulatory Whiplash or Calculated Move?

Observers note the irony: the same regulators who banned Bitcoin now champion its underlying technology. Perhaps they finally realized that controlling the ledger beats fighting it. One cynical fund manager quipped, 'They're not embracing decentralization—they're colonizing it.'

Yuan-Backed Stablecoins On Trial

According to a Reuters report, citing sources with knowledge of the matter, Beijing has disclosed that Hong Kong and Shanghai WOULD be the first places to test any new rules.

Hong Kong’s stablecoin law came into force on August 1, and Shanghai is building an international operation center for the digital yuan.

Based on reports, senior leaders could hold a study session as early as the end of the month to make clear how far stablecoins may be used and where limits must be drawn.

People’s Bank of China advisor Huang Yiping has told local media that an offshore yuan stablecoin in Hong Kong is “a possibility,” according to sources.

China Weighs Yuan-Backed Stablecoins in Push for Global Currency Adoption China is considering allowing the use of yuan-backed stablecoins for the first time as part of efforts to expand the international role of its currency, according to people familiar with the matter. The… pic.twitter.com/Brwn7lGN6E

— CN Wire (@Sino_Market) August 20, 2025

Market Size And Global Stakes

According to the Bank for International Settlements, fiat-backed stablecoins tied to the US dollar now account for nearly all of the global supply.

Latest figures put the total market at about $245 billion today, and Standard Chartered projects it could reach $2 trillion by 2028.

Based on reports, the yuan’s share of global payments slipped to almost 3% in June, while the US dollar still holds 47% of the market, according to SWIFT.

US President Donald TRUMP has publicly backed stablecoins and is pressing for a regulatory framework in the US.

According to sources, details of the stablecoin rollout may be revealed in the coming weeks. Beijing could raise the topic with trading partners at the Shanghai Cooperation Organization Summit on Aug. 31–Sep. 1 in Tianjin, the sources said.

Meanwhile, market players warn that China’s strict capital controls and large trade surpluses would complicate any plan to make yuan stablecoins useful across borders.

Reports says those controls could limit how freely a yuan-linked token moves between countries.

The roadmap is expected to include risk-prevention measures and assign implementation duties to domestic bodies, including the PBOC.

Featured image from Henderson Land, chart from TradingView