China Plans Yuan-Backed Stablecoin to Promote Global RMB Use

China is advancing plans to launch a yuan-backed stablecoin, signaling a strategic shift in its monetary policy aimed at increasing the global usage of the renminbi and reducing dependence on the U.S. dollar. The initiative, which is expected to be regulated through Hong Kong’s financial framework, represents a calculated effort to challenge the dominance of USD stablecoins in international digital currency markets [1].

According to reports, the move involves the People's Bank of China (PBOC) and is being overseen by Governor Pan Gongsheng, who emphasized the importance of aligning the stablecoin’s development with national regulatory conditions [2]. Speaking at the 2025 Lujiazui Forum, Gongsheng noted that any stablecoin initiative must comply with China's stringent requirements and receive government approval, particularly regarding offshore circulation. Hong Kong’s infrastructure and regulatory flexibility are seen as key enablers for the successful deployment of this digital currency [3].

The launch of a yuan-pegged stablecoin is anticipated to have wide-reaching implications across financial markets. It could facilitate more efficient cross-border trade and payment systems, offering businesses an alternative to USD-based stablecoins like Tether’s USDT [4]. This development aligns with China’s broader goal of promoting a multipolar global financial system, reducing the leverage of the U.S. dollar in international transactions [5].

Historically, attempts to introduce RMB-linked stablecoins, such as a CNH stablecoin proposed by Tether, have failed due to regulatory hurdles. However, the current regulatory climate in Hong Kong—now more supportive of crypto initiatives—suggests that this effort may succeed where earlier attempts did not. The Hong Kong Monetary Authority has established a robust regulatory framework, signaling a significant shift in policy that could facilitate the adoption of RMB-backed stablecoins [6].

While the initiative reflects a positive shift in China’s attitude toward digital assets, analysts caution that the long-term success of the yuan stablecoin will depend on several factors, including regulatory stability, market adoption, and the maintenance of trust in the currency’s value [7]. If successful, the stablecoin could reshape the digital currency landscape, particularly in Asian financial hubs, and potentially influence the global monetary order. For now, however, its impact remains to be seen as the project moves from planning to implementation.