Haciyev Reşit 
China is considering allowing the use of yuan-backed stablecoins for the first time to increase the international use of the yuan. According to sources, this step is seen as a critical opportunity in China’s strategy to make the yuan a more global currency.
Potential Strengthening of the Yuan Against the US Dollar
Analysts suggest that the dominance of the US dollar in global markets could be challenged through stablecoins. Beijing is expected to proactively adapt to the stablecoin trend; otherwise, the US advantage could increase. Articles in state media highlight the importance of the yuan’s potential as a global currency.
Advantages and Risks of Stablecoins
- Unlike highly volatile cryptocurrencies like Bitcoin and Ethereum, stablecoins peg their value to fiat currencies or reserve assets.
- This approach combines the efficiency of crypto with the reliability of traditional currency.
- CICC analysts note that stablecoins facilitate cross-border transactions and reduce capital and time costs.
According to Securities Times, experts argue that the development of yuan-backed stablecoins is inevitable and that their potential risks should not be ignored despite the benefits.
Regulation and Financial Security
The article emphasizes that the widespread use of stablecoins without regulations could harm the country’s financial system. At the same time, foregoing such an effective payment tool could mean missing a golden opportunity for the yuan.
Experts believe that yuan-backed stablecoins will play a significant role in China’s financial strategy. Additionally, international transfers and payments can be executed faster and more efficiently through stablecoins.
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