China’s Roadmap for Yuan-backed Stablecoins: The Shift in Crypto Dynamics
China’s cabinet is reportedly considering a strategic roadmap aimed at enhancing the use of yuan-backed stablecoins, according to a recent report by Reuters. This development could signal a significant shift in the competitive landscape of cryptocurrency, particularly as the country seeks to increase the Yuan’s global appeal and counter the dominance of the US dollar in the stablecoin market.
The Emergence of Yuan-backed Stablecoins
Stablecoins offer unique advantages within the cryptographic space, such as faster transaction speeds and constant availability. The majority of these cryptocurrencies, however, are currently pegged to the US dollar, reinforcing its dominance. China’s growing interest in yuan-backed stablecoins is viewed as an attempt to end this narrative and expand the international usability of its currency. A report from The Economist elaborates that during the Shanghai Cooperation Organisation summit, China, alongside other member states like India and Russia, agreed to increase transactions settled in local currencies, further emphasizing the need to move away from dollar reliance.
The Geopolitical Tensions and Currency Management
China’s currency management has long been a point of contention with global trading partners, notably the United States. The development of a yuan-backed stablecoin can be interpreted as an initiative to challenge the prevailing dominance of the USD. With more countries seeking to diversify their foreign exchange capabilities, China’s potential move might encourage a shift toward a more multipolar currency landscape.
Hong Kong: A Beacon of Change
Despite mainland China’s restrictions on cryptocurrency trading and mining, Hong Kong continues to pave the way for digital asset legislation. The city is on track to unveil new regulations that will allow licensed businesses to issue stablecoins linked to fiat currencies, including the US dollar. The Hong Kong Monetary Authority has set stringent licensing criteria, expecting to admit only a select few in the early stages of this transition.
By allowing the issuance of US dollar-pegged stablecoins, Hong Kong further supports China’s growing interest in the stablecoin market. If Beijing aims to internationalize the Yuan amid increasing US dollar dominance, it may also need to reconsider its stringent controls on capital movement across borders.
The Market Landscape for "Made in China" Cryptos
Currently, "Made in China" cryptocurrencies showcase a market cap of approximately $39.57 billion. Leading tokens include TRON, OKB, and VeChain (VET), which have recently experienced increased trading volumes. As of early September, over $1 billion was reported for the 24-hour trade volume within this category.
Price movements among these assets frequently correlate with speculative narratives regarding potential crypto adoption in mainland China. Social media buzz around possible regulatory changes has historically driven significant price spikes, particularly from December 2024 to August 2025.
Interestingly, even with the ban on cryptocurrencies in mainland China, traders are reportedly engaging with stablecoins on a significant scale. Estimates suggest that in 2024 alone, Chinese traders purchased around $18.6 billion in stablecoins, which points to a palpable demand that persists despite regulatory barriers.
Insight from Industry Experts
Jamie Elkaleh, Chief Marketing Officer at Bitget Wallet, shared insights on the implications of these developments. Discussing Air China’s loyalty program, which is looking to accept XRP payments, he noted that while strict crypto bans complicate local operations, it reflects the growing trend among companies to implement blockchain solutions to enhance customer engagement.
Elkaleh further highlighted that China’s consideration of a roadmap to improve the yuan’s international presence signals a broader ambition to diversify global settlements away from the US dollar. As crypto continues to merge with traditional financial infrastructures, the role of stablecoins will be crucial in establishing these new financial ecosystems that transcend local borders.
The Future of Crypto Adoption in Asia
As Asia embraces digital currencies, wallets and fintech solutions are witnessing a surge in demand. While clear regulatory frameworks exist in markets like Singapore and Hong Kong, the broader region is poised for substantial growth in crypto adoption. Mobile-centric cultures create unique entry points for users, characterized by cheap and efficient remittances, along with integration into growing e-commerce and gaming sectors.
All these trends suggest a trajectory towards higher user adoption rates throughout Asia, predicted to grow at a compound annual rate of 25-30% up to 2030. The forward momentum is largely driven by practical use cases and a need for innovative financial solutions, which continue to capture the attention of both institutional and retail investors.
In the evolving landscape of global finance, China’s potential pivot toward yuan-backed stablecoins represents not just a strategic maneuver but also a broader rethinking of how currencies can operate in a decentralized world, challenging the hegemonic narrative that has long favored the dollar.