China Explores Yuan-Backed Stablecoins in Bid to Challenge Dollar Dominance

China is preparing a significant policy shift by considering the approval of yuan-backed stablecoins, marking a stark reversal from its 2021 cryptocurrency ban. The State Council will review a roadmap for yuan internationalization later this month, with Hong Kong and Shanghai positioned as early adopters for implementation.

The MOVE targets the dollar's stranglehold on global payments, where USD-backed stablecoins currently command over 99% market share. Policy discussions during the upcoming Shanghai Cooperation Organisation Summit may further outline plans to expand yuan usage through digital assets.

This development signals Beijing's strategic pivot toward blockchain-based financial instruments despite previous crackdowns. The August leadership meeting will establish regulatory parameters for stablecoin development, suggesting a measured approach to cryptocurrency integration within China's controlled financial ecosystem.