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 increasingly integrated into global trade and finance. This prediction was made during an interview with Reuters in Hong Kong.
The concept of a yuan-backed stablecoin has shifted from a speculative idea to a potential policy alignment. In August 2025, Reuters reported that Chinese officials were exploring the idea of a yuan-backed stablecoin to boost its international adoption, marking a notable shift for a country that banned crypto 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 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. Without full convertibility, a yuan stablecoin would be impossible, according to experts. Currently, capital controls remain a key aspect of Chinese economic policy, and a stablecoin backed by the offshore yuan is distinct from one backed by the onshore yuan. Allaire's timeline depends on whether China views stablecoins as a workaround or a commitment.
The technology can advance quickly, but the policy decision is the more challenging part. The global stablecoin market is currently worth nearly $315 billion, with privately issued dollar-pegged tokens making up the majority of the total value.