Beijing Investigates A Chinese Stablecoin Approach To Challenge Dollar’s Supremacy

The emergence of dollar-pegged stablecoins is making waves globally. Nevertheless, China is expressing discontent regarding their increasing sway in international finance. There are indications that a Chinese stablecoin may soon come to fruition as the nation investigates stablecoins backed by the yuan, marking a significant shift towards digital currencies.

An article published by Reuters on August 21, 2025, highlights that the Chinese Council is actively seeking methods to globalize the Yuan and plans to examine a strategic plan for this later this month.

This initiative encompasses the creation of a Chinese stablecoin.

BREAKING: China is considering yuan-backed stablecoins, with plans for implementation in Hong Kong and Shanghai for international use – Reuters. pic.twitter.com/YfqhVEta1E

— Big investor Insider (@WhaleInsider) August 20, 2025

Reports suggest that this move is a direct counter to the rising power of US dollar-pegged stablecoins, including USDT and USDC, which have become integral to the global crypto asset landscape and are increasingly utilized in international transactions.

As per Reuters, Hong Kong and Shanghai will act as initial platforms for this venture, where top leadership is scheduled to hodl a study session regarding stablecoins to shape the policy surrounding the Chinese stablecoin.

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Chinese Exporters’ Dependence on USDT, USDC Fuels Shift to Chinese Stablecoin

The significant role of dollar-pegged stablecoins has prompted an immediate strategy change in China aimed at developing a yuan-backed stablecoin. Given that stablecoins are primarily employed for cross-border dealings, those tied to the dollar provide a substantial competitive edge to the US over China.

According to the Bank for International Settlements, US-backed stablecoins account for more than 99% of the world’s stablecoin market.

However, the surge in the adoption of dollar-pegged stablecoins by Chinese exporters has catalyzed this shift towards stablecoins, as highlighted in the Reuters report.

This trend poses a significant concern for Chinese officials since every transaction executed in USDT or USDC reinforces the dollar’s supremacy and facilitates the emergence of a parallel financial framework that can evade conventional regulation.

The increasing prevalence of USDT and USDC in China undermines the Chinese government’s efforts to globalize the Yuan.

The upcoming Shanghai Cooperation Organisation Summit in Tianjin later this month will mark the diplomatic unveiling of China’s revamped financial agenda.

Deliberations are expected to focus on promoting settlements in yuan and introducing its nascent stablecoin to member nations as China aims for a multipolar financial system that is less reliant on Western financial structures.

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People’s Bank Of China Takes Charge

The report states that the People’s Bank of China, along with other domestic regulators, will spearhead the implementation of this initiative.

This abrupt transition to stablecoins marks a stark deviation from China’s comprehensive prohibition on crypto asset, which was first enforced in 2021 and has been recently intensified.

In 2021, Chinese authorities enforced a prohibition on cryptocurrency trading and crypto mining due to worries over speculative hazards and financial protection.

The ban specifically targeted decentralized, privately issued currencies that fell outside regulatory oversight. Conversely, the pivot to stablecoin reflects a centralized approach where authorities can harness blockchain technology’s benefits.

In this context, the state is reclassifying cryptocurrency without embracing its underlying principles to achieve its geopolitical goals.

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The post Beijing Explores A Chinese Stablecoin Solution To Counter Dollar’s Dominance appeared first on 99Bitcoins.