Yuan-Pegged Stablecoins On The Horizon As Beijing Rethinks Policy

by

Ah, dear Beijing, always full of surprises! It seems the great capital is pondering a plan so bold, it could let yuan-backed stablecoins spread their wings-far beyond the Great Wall, no less!

Such a move would be as unexpected as a panda winning a gold medal in pole vaulting. It would mark a significant departure from the 2021 crackdown on crypto, showing just how quickly the winds of policy can change. Let us not forget the big plan will also come with shiny new targets, risk rules, and of course, a clear map of which regulators must step into the arena.

The State Council, in all its wisdom, is said to be preparing a review of this roadmap sometime later this month, a document that will outline exactly who does what and when (and perhaps even why, though we can’t be sure!).

The Glorious Testing Grounds of Stablecoins

And now, the plot thickens! Reuters, the ever-watchful eye of financial affairs, reports that Beijing has decided Hong Kong and Shanghai will be the first to test the mighty stablecoins. It’s like picking the VIPs for a new restaurant opening-Hong Kong’s stablecoin law is already in effect (since August 1), while Shanghai is busy building the future, one digital yuan at a time.

Rumor has it that the decision-makers could soon gather for a study session, perhaps before the month’s end, to sort out exactly how far these stablecoins may roam and where the imaginary line in the sand will be drawn. Such suspense, I can hardly bear it!

And speaking of offshore yuan, a certain Huang Yiping, advisor to the People’s Bank of China, has teased that an offshore yuan-backed stablecoin in Hong Kong is “a possibility.” Yes, you heard that right-“a possibility.” Because who doesn’t like a good, juicy “maybe” in finance?

China Weighs Yuan-Backed Stablecoins in Push for Global Currency Adoption China is considering allowing the use of yuan-backed stablecoins for the first time as part of efforts to expand the international role of its currency, according to people familiar with the matter. The…

– CN Wire (@Sino_Market) August 20, 2025

The Vast, Uncharted Market of Stablecoins

Now, let’s talk numbers, shall we? According to the Bank for International Settlements (a place where figures roam free), the US dollar-backed stablecoins dominate the global scene. They account for nearly all the supply, like an overachieving student who does everything better than everyone else.

Current estimates put the market size at a whopping $245 billion-yes, billion with a B! But wait, there’s more-Standard Chartered predicts it could soar to $2 trillion by 2028. A rather ambitious forecast, wouldn’t you agree? It’s almost as if someone is dreaming of a financial utopia, where the yuan plays a starring role.

However, the yuan’s global payment share has taken a slight dive, slipping to a humble 3% in June. Meanwhile, the US dollar continues to bask in its glory with 47% of the market, as if saying, “Don’t worry, I’ve got this.”

Meanwhile, the ever-charismatic Donald Trump, with his own flair for drama, has thrown his support behind stablecoins in the US. And, naturally, he’s pushing for a regulatory framework in his own image. But enough about that, let’s move on!

As for the stablecoin rollout, sources say we might hear more in the coming weeks, perhaps even during the Shanghai Cooperation Organization Summit on Aug. 31-Sep. 1 in Tianjin. A splendid time for a reveal, wouldn’t you say?

Graph showing Stablecoin Market Trends

Practical Limits And Policy Trade-Offs

But, of course, not everything is as simple as it seems in the world of stablecoins. Market players, ever the voice of reason, have pointed out that China’s strict capital controls and massive trade surpluses may cause a few headaches when it comes to making yuan stablecoins work smoothly across borders.

Yes, those controls could limit the free movement of yuan-linked tokens, which could, alas, dampen the global reach of the mighty stablecoin.

In the end, the roadmap is expected to include precautionary measures-after all, safety first! And naturally, it will assign the implementation duties to various domestic bodies, including the ever-watchful People’s Bank of China (PBOC). Because who else but them to handle such delicate matters?

Read More

2025-08-21 07:45