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

In a recent interview with Reuters in Hong Kong, Circle CEO Jeremy Allaire expressed his belief in the potential for a yuan-backed stablecoin, predicting that China could launch one within the next three to five years as digital currencies become increasingly integral to global trade and finance. This represents a shift from a speculative concept to a more policy-aligned idea. As reported by Reuters in August 2025, Chinese officials are exploring the development of a yuan-backed stablecoin to enhance its international adoption, marking a significant turn for a country that has banned cryptocurrency trading and mining since 2021. Allaire has been advocating for this concept since at least 2023, arguing that stablecoins could outperform central bank digital currencies in promoting RMB internationalization. At the time, Beijing's stance seemed strongly opposed, with authorities arresting individuals linked to CNHC, an offshore yuan stablecoin, and later reiterating restrictions on virtual currencies. However, the perception of stablecoins has changed over the years, with them now being viewed as financial infrastructure for cross-border settlement rather than speculative crypto products. For China to successfully launch a yuan stablecoin, it would be necessary 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 cornerstone of Chinese economic policy, and a stablecoin backed by the offshore yuan (CNH) would be distinct from one backed by the onshore yuan (CNY), with the former being compatible with 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 happen quickly, 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 (USDC) comprising the majority of the total value.