China Weighs Yuan-based Stablecoin Amid Global Market Shift

China is exploring the launch of a yuan-backed stablecoin, marking a potential reversal in its historically hostile stance toward digital assets. The State Council may approve a roadmap by late August, with Shanghai and Hong Kong serving as initial testbeds. This MOVE comes as the yuan's share of global payments hits a two-year low at 2.88%, while the US dollar maintains 47.19% dominance.

Hong Kong's new stablecoin regulations took effect August 1, coinciding with Shanghai's development of a digital yuan hub. The initiative contrasts sharply with China's 2021 cryptocurrency ban, suggesting strategic recalibration toward blockchain-based financial infrastructure.

Meanwhile, US regulatory advances like the GENIUS Act reinforce dollar-pegged stablecoins. President Trump's consistent support for crypto assets since taking office has bolstered America's position in the digital currency race.