China's State Council is preparing a new plan aimed at expanding the international use of the yuan, which may include stablecoins for the first time.
Overview of the New Plan
According to sources, China's State Council is considering a strategy that may allow yuan-backed stablecoins for the first time. This signifies a shift in China's stance on digital assets, which has been restrictive since a comprehensive ban on cryptocurrency trading in 2021.
Role of Stablecoins in the Economy
The initiative aims to strengthen the yuan’s global presence at a time when the U.S. dollar dominates international finance. Stablecoins, cryptocurrency pegged to stable assets, are seen as a potential tool for improving cross-border transaction efficiency. They enable faster and cheaper transfers using blockchain technology.
Geopolitical Significance of the Initiative
Details of the plan are expected to be discussed at an upcoming international summit in Tianjin, highlighting its geopolitical importance. The global stablecoin market, currently valued at about $247 billion, is projected by some analysts to grow substantially in the coming years.
In conclusion, the new initiative by China to implement stablecoins aimed at expanding the yuan’s use in international transactions could significantly alter the current dynamics of global finance. However, strict capital controls remain a significant obstacle to the widespread adoption of stablecoins.
