China May Introduce a Yuan-Backed Stablecoin Within 3-5 Years, Says Circle CEO

According to Circle CEO Jeremy Allaire, China may launch a yuan stablecoin in the next three to five years, as digital currencies become increasingly integral to global trade and finance. Allaire emphasized the vast potential for a yuan-backed stablecoin during an interview with Reuters in Hong Kong. This prediction comes as digital currencies are becoming more deeply embedded in global trade and finance, marking a significant shift from speculative ideas to policy-aligned initiatives. In August 2025, Chinese officials were reportedly exploring the development of a yuan-backed stablecoin to boost its international adoption, a notable departure from the country's previous ban on crypto trading and mining since 2021. Allaire has been advocating for stablecoins as a means to internationalize the RMB since at least 2023, arguing that they could outperform central bank digital currencies. At the time, Beijing's stance seemed firmly opposed, with authorities arresting individuals linked to an offshore yuan stablecoin and reiterating restrictions on virtual currencies. However, in recent years, stablecoins have been viewed less as speculative crypto products and more as essential financial infrastructure for cross-border settlements. For China to successfully launch a yuan stablecoin, it would need to make the RMB fully convertible, allowing foreigners and markets to freely exchange yuan without stringent government restrictions on capital flows. Experts agree that without full convertibility, a yuan stablecoin would be unfeasible. Currently, capital controls remain a cornerstone of Chinese economic policy, and a stablecoin backed by the offshore yuan (CNH) differs significantly from one backed by the onshore yuan (CNY), with the former operating within existing controls and the latter not. The timeline proposed by Allaire ultimately depends on whether China views stablecoins as a workaround or a long-term commitment. While technological advancements can occur rapidly, policy decisions often prove more challenging. The global stablecoin market is currently valued at nearly $315 billion, with privately issued dollar-pegged tokens such as Tether USDT and USD Coin (USDC) comprising the bulk of the total value.