China has announced the development of a yuan-backed stablecoin, which may affect the international fintech market and stable currencies.
Yuan-Backed Stablecoin Roadmap
The State Council and the People's Bank of China are working on creating a stable currency pegged to the yuan. This initiative aims to integrate digital assets into the global fintech landscape and effectively manage capital controls.
Reaction to China’s Initiative
Markets are poised to assess the impact on the dominance of USD stablecoins like USDT and USDC, which currently hold about 99% of the global supply. Hong Kong's new legislation is creating conditions for institutional engagement.
China's Digital Currency Policy Shift
This move contrasts with the ban on cryptocurrency trading in 2021 and may shift global fintech dynamics. Kanalcoin analysis suggests that a yuan-backed stablecoin could influence trading flows in regional payment systems in the Asia-Pacific region.
The initiative to create a yuan-backed stablecoin reflects China's ambition to lead in the field of new financial technologies and digital currencies.
