China Digital Push — Beijing is preparing to introduce a yuan-backed stablecoin, marking a dramatic policy reversal aimed at reclaiming currency influence in a market dominated by U.S. dollar-based tokens.
China Digital is reportedly planning to authorize yuan-backed stablecoins in a marked shift from its previous cautious approach toward digital currencies. The State Council is set to review a proposed roadmap later this month—detailing goals for the yuan’s global use, assigning regulator roles, and outlining risk-control measures ReutersFinance Feeds.
If approved, this initiative would reverse China’s 2021 cryptocurrency crackdown and aim to elevate the yuan in international markets, particularly as over 99% of currently circulating stablecoins are pegged to the U.S. dollar ReutersFinance FeedsWikipedia. Key financial centers—Hong Kong and Shanghai—are expected to lead early implementation, especially since Hong Kong recently enacted regulations for stablecoin issuers ReutersFinancial TimesThe Economic Times.
Additionally, Ant Group has revealed plans to apply for a stablecoin issuance license in Hong Kong, aligning with the new legal framework set to take effect on August 1 Reuters.
Notably, this move comes amid rising geopolitical tension with the U.S. and growing reliance on dollar-based stablecoins by Chinese exporters China Digital. Proponents of the yuan-backed stablecoin view it as a strategic tool to strengthen the yuan’s international standing and challenge the dollar’s digital dominance ReutersFinancial Timesmint.
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