China Explores Yuan-Backed Stablecoins for Oil Trade Settlements

China National Petroleum Corporation (CNPC), a global energy giant, is studying the feasibility of using stablecoins for cross-border payments, particularly in oil trade. The MOVE aligns with China's strategy to expand the yuan's international influence, which currently accounts for just 2.88% of SWIFT transactions compared to the dollar's 47.19% dominance.

The State Council will discuss yuan stablecoin adoption at the upcoming Shanghai Cooperation Organization summit. China has precedent in currency-linked oil trades, with 90% of its Russia transactions already settled in yuan and rubles. CNPC's monitoring of Hong Kong's stablecoin licensing suggests potential ambitions to become an issuer itself.

Energy-sector adoption could dramatically reduce settlement times and costs for cross-border transactions. This development marks another step in China's long-standing 'petroyuan' strategy to challenge dollar hegemony in commodity markets.