China might change its stance on stablecoins by exploring the possibility of approving yuan-backed stablecoins. This would mark a significant reversal from its hardline position taken in 2021.
News Summary
China is considering approving stablecoins backed by the yuan, which could indicate a change in its current position on cryptocurrencies. This intent aims to strengthen the yuan's role on the international stage.
China's Strategic Shift
This step comes nearly four years after China banned crypto trading and mining in September 2021. According to Reuters, the government plans to discuss a roadmap for issuing stablecoins later this month. This could signal that authorities now view stablecoins as a tool to enhance the yuan's significance in global finance.
Global Competition with the Dollar
As dollar-backed stablecoins account for nearly 98% of the $288 billion global market, competition with the United States becomes increasingly significant. China's roadmap emphasizes cross-border trade and payments, with Hong Kong and Shanghai identified as key launch hubs.
The potential changes in China's policy could significantly impact the global stablecoin market and elevate the yuan's status as an international currency.
