China is on the verge of a financial transformation that could reshape the global currency landscape. Sources reveal that Beijing is preparing to launch yuan-backed stablecoins in a strategic move to internationalise the renminbi and disrupt U.S. dollar dominance in cross-border transactions.
The State Council, China’s highest administrative body, is expected to approve a new roadmap by the end of August 2025. This roadmap includes clear regulatory guidelines, usage targets for the yuan, and an implementation plan involving major financial hubs like Hong Kong and Shanghai.
From Crypto Ban to Strategic Embrace
The move marks a dramatic shift from China’s 2021 ban on crypto trading and mining. Stablecoins—cryptocurrencies pegged to fiat currencies—were once viewed with suspicion. But the dominance of U.S. dollar-backed stablecoins (over 99% market share) has pushed China to reconsider its stance.
Beijing’s pivot comes as global stablecoin market value reaches $247 billion, with forecasts from Standard Chartered suggesting it could balloon to $2 trillion by 2028. By tapping into this market early, China aims to position the yuan as a viable digital currency in global finance.
Yuan’s Struggles in the Global Arena
Despite being the world’s second-largest economy, China’s currency remains underrepresented in global payments. In June 2025, the yuan’s share of global payments dipped to 2.88%, compared to the U.S. dollar’s 47.19%, according to SWIFT.
Tight capital controls and a massive trade surplus have traditionally limited the yuan’s global appeal. Stablecoins, by enabling low-cost, borderless 24/7 transfers, offer a workaround to these barriers—particularly for cross-border trade with Belt and Road countries and members of the Shanghai Cooperation Organisation (SCO).
Hong Kong and Shanghai: Digital Finance Testbeds
The plan’s rollout will begin in Hong Kong and Shanghai, where regulatory innovation is already underway. On August 1, 2025, Hong Kong enacted a stablecoin ordinance, making it one of the first jurisdictions globally to regulate fiat-backed stablecoins.
Meanwhile, Shanghai is working on an international operations centre for the digital yuan, aligning its strategy with Beijing’s internationalisation goals. Reports indicate both cities will fast-track policy experimentation and local implementations.
Setting the Global Agenda
Senior Chinese leaders are set to hold a study session by the end of August to define the tone and scope of stablecoin development. This meeting will likely coincide with the SCO Summit in Tianjin (Aug 31–Sep 1), where broader use of yuan and digital currencies in trade and finance will be on the agenda.
Additionally, PBOC advisor Huang Yiping hinted at the possibility of offshore yuan stablecoins, particularly through Hong Kong—signalling that the initiative is not just for domestic use, but global integration.
Competitive Context
China is not alone in the region. South Korea is moving to legalise won-backed stablecoins, while Japan is developing infrastructure to support digital assets. In the West, the U.S. is shaping a regulatory framework under the Trump administration to support dollar-pegged stablecoins.
With fintech stocks surging—ZhongAn Online up 11.5%, Bright Smart Securities 9.9%, and Guotai Junan International 8.6%—markets are responding positively to China’s stablecoin momentum.