China Explores Yuan-Backed Stablecoins Amid Dollar Dominance in Crypto Settlements

China is quietly advancing plans for yuan-backed stablecoins, marking a strategic pivot from its 2021 crypto ban. The State Council will review a roadmap later this month outlining regulatory frameworks, risk controls, and implementation by the People’s Bank of China. Pilot programs are expected in Hong Kong and Shanghai.

The MOVE aims to counter the dollar’s stranglehold on crypto settlements—over 99% of stablecoins are dollar-pegged, per Reuters. It aligns with Beijing’s broader push to internationalize the yuan, which accounted for just 2.88% of global payments in June. Capital controls remain a hurdle for offshore circulation.

Senior leadership will delineate commercial boundaries ahead of the Shanghai Cooperation Organization summit in August. A compliant stablecoin could streamline regional trade invoicing, though technical and geopolitical challenges persist.