China is considering allowing the use of yuan-backed stablecoins for the first time as part of a new strategic plan to boost international adoption of its currency, Reuters reported on Wednesday, citing sources familiar with the matter.
According to the report, China’s State Council is expected to review later this month a roadmap that sets targets for expanding the yuan’s use in global trade and payments.
The plan would assign regulatory responsibilities to domestic agencies, introduce risk-management guidelines, and include exploration of yuan-backed stablecoins, per the report.
Approval of such a plan would mark a notable shift in Beijing’s approach to digital assets. Until now, authorities have prioritized the central bank’s digital yuan while keeping tight restrictions on privately issued tokens.
It is speculated that Hong Kong and Shanghai could serve as central hubs for any yuan-based stablecoin initiative. Hong Kong recently implemented a Stablecoin Ordinance, effective August 1, providing a regulated framework for licensed issuers to launch fiat-backed stablecoins.
Reuters noted that the proposed blueprint also comes as the United States advances its own work on dollar-backed stablecoins, which currently dominate the global market. More than 99% of stablecoins in circulation are pegged to the US dollar.