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

According to Circle CEO Jeremy Allaire, China has a significant opportunity to launch a yuan-backed stablecoin, which could happen within the next three to five years as digital currencies become more integral to global trade and finance. This prediction was made during an interview with Reuters in Hong Kong. Allaire's statement marks a shift from a speculative idea to a more concrete policy alignment, following reports in August 2025 that Chinese officials were exploring the possibility of a yuan-backed stablecoin to boost its international adoption. This development is notable, given that China has banned cryptocurrency 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 firmly opposed, 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. For China to launch a yuan stablecoin, it would need to make the RMB fully convertible, allowing foreigners and markets to freely exchange yuan without strict government restrictions on capital flows. Experts agree that without full convertibility, a yuan stablecoin would not be feasible. 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 former can exist within existing controls, while the latter cannot. Allaire's predicted timeline depends on whether China views stablecoins as a workaround or a long-term commitment. While the technology can advance quickly, the policy decision is often the more challenging part. 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.