Digital Yuan: China's New Weapon in the Currency Race?

(Dan Tri) - If implemented, China's plan to issue and use stablecoins will open an important turning point in how Beijing shapes and approaches the digital asset sector.

According to Reuters, the Chinese government will review and approve a roadmap to allow organizations to issue stablecoins later this month. Experts say this move is aimed at increasing the coverage of the yuan around the world and also to catch up with the US's policy moves related to stablecoins.

“The plan is expected to include the objectives of using yuan-pegged stablecoins in global markets as well as the responsibilities of domestic agencies. It will also include guidelines for risk prevention,” the source told Reuters.

Stablecoins are a type of cryptocurrency that is often pegged to another asset to keep its value stable. This type of digital currency is receiving increasing attention in the global financial community. In mid-July this year, the US became the first country in the world to issue a legal framework specifically for stablecoins.

Another Reuters source said senior Chinese leaders are expected to meet to discuss the matter in late August.

Details of Beijing’s plan are expected to be announced in the coming weeks. Regulators including the People’s Bank of China (PBOC) will be tasked with implementing the plan.

Chinese Yuan (Photo: iStock).

If implemented, China’s plan to introduce a stablecoin would mark a major shift in the country’s approach to digital assets. In 2021, Beijing banned cryptocurrency trading and mining amid concerns about the currency’s risks to the financial system.

China has long sought to elevate the renminbi’s status in the world, achieving a status similar to that of the US dollar or the euro, reflecting its status as the world’s second-largest economy . However, strict capital controls and an annual trade surplus of trillions of dollars are obstacles to this goal.

These could also be major barriers to the development of stablecoins in China, experts say. Stablecoins are designed to maintain a fixed value and are often pegged to a fiat currency such as the US dollar and are used by traders to buy and sell other cryptocurrencies.

According to the SWIFT payment platform, the share of the yuan in global payments fell to 2.88% in June, the lowest level in the past two years. In contrast, the share of the US dollar increased to 47.19%.

In Asia, South Korea has also announced that it will allow companies to issue stablecoins pegged to the won and develop the necessary infrastructure related to this cryptocurrency. Similar initiatives are also being implemented in Japan.

The global stablecoin market is currently relatively small, with a total market capitalization of around $247 billion, according to cryptocurrency data provider CoinGecko. However, Standard Chartered Bank predicts that the market could grow to $2 trillion by 2028.

Notably, according to data from the Bank for International Settlements (BIS), USD-pegged stablecoins currently dominate the global stablecoin market, accounting for more than 99%.

Source: https://dantri.com.vn/kinh-doanh/tien-so-nhan-dan-te-vu-khi-moi-cua-trung-quoc-trong-cuoc-dua-tien-te-20250821233538261.htm