China is considering allowing a yuan-backed stablecoin for the first time as part of efforts to increase global adoption of its currency, Reuters reported.
The potential policy move marks a major shift from China’s previous stance on digital assets. The State Council, China’s top cabinet, is expected to review and possibly approve an action plan in late August aimed at promoting wider use of the yuan internationally, including initiatives to rival the development of stablecoins pioneered by the United States.
The plan is likely to include:
Specific targets for the use of the yuan in global markets
Allocation of responsibilities to domestic regulators
Guidelines for preventing risks related to the digital asset
China’s top leadership is also planning to hold a special study session on the internationalization of the yuan and stablecoins as early as the end of August. At the meeting, senior officials are expected to deliver key statements that will set the tone for the development of stablecoins and define their limitations in a business context.
Stablecoins are usually backed by traditional currencies or assets that are now gaining ground in global financial markets.
