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

According to Circle CEO Jeremy Allaire, China may unveil a yuan-backed stablecoin within three to five years, as the integration of digital currencies into global trade and finance accelerates. Allaire expressed this view in a recent interview with Reuters in Hong Kong, highlighting the vast potential for such a stablecoin. This development marks a significant shift from a speculative concept to a policy-aligned initiative. In August 2025, Chinese officials reportedly explored the idea of a yuan-backed stablecoin to enhance international adoption, a notable departure from the country's 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. Initially, Beijing's stance seemed opposed to this idea, with authorities arresting individuals linked to an offshore yuan stablecoin and reiterating restrictions on virtual currencies. However, in recent years, stablecoins have started to be viewed as financial infrastructure for cross-border settlement rather than speculative crypto products. To launch a yuan stablecoin, China would need to make the RMB fully convertible, allowing foreigners and markets to freely exchange yuan without government restrictions on capital flows. Without full convertibility, a yuan stablecoin is deemed impossible by experts. Currently, capital controls remain a crucial aspect of Chinese economic policy, and a stablecoin backed by the offshore yuan is distinct from one backed by the onshore yuan. The timeline proposed by Allaire hinges on whether China views stablecoins as a workaround or a long-term commitment. The technology can advance quickly, but policy decisions are often 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 making up the majority of the total value.