Stablecoins have emerged as a new lever for national currencies on the global stage. In an interview with Reuters, Circle CEO Jeremy Allaire highlighted the significant potential of a stablecoin based on the Chinese yuan.
According to him, a fiat-backed digital asset could enhance the competitiveness of the Chinese currency and simplify global payments.
“A yuan stablecoin represents a colossal opportunity. In the currency race, the one with the best characteristics wins. This is a technological race,” Allaire stated.
The CEO of the USDC issuer predicted the emergence of a Chinese stablecoin within the next three to five years.
Allaire has held this view since at least 2023, previously asserting that stablecoins could be a more effective tool for the internationalization of the yuan than CBDCs.
Current Stance of Authorities
In July 2025, Chinese giants Ant Group and JD urged the People's Bank of China (PBOC) to legalize yuan-backed stablecoins in addition to existing tokens based on the Hong Kong dollar.
Subsequently, reports emerged that the government is considering approving fiat-backed stablecoins.
However, authorities are currently taking a cautious approach. In August of the same year, Chinese financial regulators demanded that brokerage firms and analytical centers cancel seminars and cease publishing research on fiat-linked assets.
Later, the PBOC confirmed the illegal status of digital assets in the country and outlined the risks associated with the use of stablecoins.
In February 2026, the PBOC and key agencies banned the issuance of yuan-linked stablecoins outside the country without prior registration.
Officials also announced stricter regulations on the tokenization of Chinese RWAs. The aim of these measures is to protect financial stability, curb capital outflows, and maintain monetary sovereignty amid China's promotion of its digital currency, e-CNY.
It is worth noting that The Economist expressed doubts about the success of the yuan stablecoin due to the country's stringent capital controls.