China May Introduce a Yuan-Backed Stablecoin Within Five 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 made this prediction during a conversation with Reuters in Hong Kong, highlighting the vast potential for a yuan-backed stablecoin. This marks a shift from a speculative concept to a more policy-aligned idea. As recently as August 2025, Chinese officials were reportedly exploring the development of a yuan-backed stablecoin to boost international adoption, a notable change in stance for a country that banned cryptocurrency trading and mining in 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 later 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 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. Without full convertibility, a yuan stablecoin would be unfeasible, according to 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, with the former complying 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 the technology can advance rapidly, the policy decision remains the more challenging aspect. 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.