China’s State Council plans to allow the use of yuan-backed stablecoins for the first time. According to sources familiar with the matter, this move aims to strengthen the global role of the Chinese yuan. If approved, the move is significant toward increasing the international use of China’s currency and reducing reliance on the US dollar. Yuan-Backed Stablecoins at the Forefront of Global Financial Innovation Notably, China intends to discuss its plans at the upcoming Tianjin Summit later this month. This important event will see Chinese officials present a strategy for increasing the use of the yuan in international markets. The plan will outline goals for the global use of the yuan, define roles for domestic regulators, and provide guidelines for managing financial risks associated with the use of digital currency. Unlike unstable cryptocurrencies, stablecoins are digital tokens tied to a stable asset, in this case, the Chinese yuan. They facilitate fast, cheap, and more secure cross-border transactions. These stablecoins are also a useful option for international trade and finance. Experts view this development as a response to the ongoing dominance of the US dollar, which accounts for the majority of global reserves and trade settlements. By utilizing blockchain technology and regulated stablecoins, China will make the yuan a strong option as a reserve currency, most especially in developing markets and digital economies. China Forges Ahead in Crypto Innovation The Republic of China has enjoyed remarkable advancements in its crypto sector. China’s development of the digital yuan and its effort in exploring blockchain technology showcase its commitment to driving innovation in cryptocurrency. Recall that the digital yuan, a Central Bank Digital Currency (CBDC) of the People’s Republic of China, demonstrated impressive growth in transactions. Last year, it was announced that the CBDC surpassed popular stablecoins USDC and USDT in activity, achieving a transaction volume of over $1 trillion, equivalent to 7 trillion yuan. China’s Growing Interest in Stablecoins and RWAs Interestingly, Chinese government officials are paying more attention to stablecoins and real-world assets (RWAs). Some government officials have started to explore how these tools can be used to support financial innovation, improve payment systems, and promote the digital economy. This suggests that while China remains cautious about cryptocurrencies, the country is not completely closing the door on blockchain and digital assets . The post China Seriously Mulling Yuan-Backed Stablecoins appeared first on TheCoinrise.com .
