China will review a plan later this month that could allow yuan-backed stablecoins for the first time, sources told Reuters’ reporters, published earlier today, on August 20th. The State Council, which is the country’s cabinet, will study a roadmap to widen the yuan’s use abroad. 

The move aims to catch up with a U.S. push on stablecoins and set targets for how the currency is used in global markets. 

Regulators would be given duties, and the plan would include rules for risk prevention. Senior leaders may meet as early as the end of this month to set the tone and define where stablecoins can be used.

Plan and timing

Officials expect the roadmap to spell out specific targets for yuan usage overseas. It will also assign roles to domestic regulators and give guidance on managing risks. 

The sources said a study session of top leaders could happen at the end of the month. Details are due to be released in the coming weeks if the plan is approved. The sources spoke on condition of anonymity because they were not authorised to talk to the media.

Why does this mark a shift?

If approved, the plan would mark a big change in China’s stance on digital assets. The country banned crypto trading and mining in 2021 over worries about financial stability. 

Now, Beijing appears ready to use stablecoins as a tool to push the yuan abroad. Stablecoins are gaining traction worldwide, and Beijing wants to keep pace as other nations move faster.

How stablecoins would work?

Stablecoins are digital tokens meant to hold a steady value, usually tied to a fiat currency such as the U.S. dollar. They run on blockchains and let users move money instantly and at low cost. 

That rail makes them useful for cross-border payments and other fast transfers. The plan would aim to harness those features while trying to limit risks to the financial system.

Also Read: China to Greenlight First RMB-Backed Stablecoin To Boost Yuan’s Global Role

The push for yuan internationalisation

China has long aimed to raise the yuan’s global role, but tight capital controls and large trade surpluses have limited that effort. Those controls are likely to be a major hurdle for stablecoin growth, market participants say. 

Officials plan to set clear limits and guardrails so stablecoins can be used without weakening controls that manage money flows.

Hong Kong and local moves

Hong Kong has already moved to regulate fiat-backed stablecoin issuers, and a stablecoin ordinance took effect on August 1. That law positions the territory as one of the first to set formal rules. 

In mainland China, a Shanghai regulator recently held a meeting with local officials to consider how to respond to stablecoins and digital currencies. PBOC advisor Huang Yiping told local media that an offshore yuan stablecoin in Hong Kong is a possibility.

U.S. developments and global context

The push also follows recent moves in the U.S., where President Donald Trump expressed support for stablecoins early this year, and a regulatory framework is being developed. 

Beijing’s plan reflects wider interest in using stablecoins to speed up payments and reshape cross-border flows. The underlying blockchain tech can cut costs and work around daylight limits that slow traditional payment systems.

UnoCrypto also reported, a bill on won-backed stablecoins will be introduced in Seoul by the Financial Services Commission of South Korea. This fall, the Financial Services Agency (FSA) of Japan is also anticipated to approve the first stablecoin backed by the yen.

The action is taken while lawmakers and the government work to establish regulations that will regulate internal controls, collateral management, and issuance.

Numbers and scope

The yuan’s share of global payments has slipped to 2.88% in June, its lowest point in two years, according to payment data cited by the sources. 

By contrast, the U.S. dollar held 47.19% of the global payment share. Those figures help explain why Beijing sees fresh tools as needed to grow the yuan’s reach.

The PBOC and the State Council Information Office did not immediately respond to requests for comment. Regulators will have to balance openness with strict controls. They will need to spell out what kinds of stablecoins are allowed and how to protect investors and payment systems.

Also Read: China Orders Local Brokers To Stop Promoting Stablecoins In Effort To Control Market Risks