The State Council – the Cabinet of China – will revise a route map later this month and possibly approve the more use of the currency worldwide, including catching up an American push on Stablecoins, said the sources.
The plan is expected to include goals for the use of the Chinese currency on the worldwide markets and sketching the responsibilities of domestic regulators, they said, adding that the route map will also contain guidelines for risk libel. The senior leadership of the country is expected to come together after the end of this month for a study session, aimed at Yuan Internationalization and Stablecoins, who live in power worldwide, said one of the sources. In that meeting, senior leaders will probably give comments to set the tone for Stablecoins and to define the limits of the application and development in business, the source said.
China’s plan for the use of stablecoins, if approved, would mark a major shift in his approach to digital assets. The country forbade cryptocurrency trade and mining in 2021 due to concerns about the stability of the financial system. China has long been to reach the Yuan to achieve global currency status, related to the dollar or euro, which reflects its weight as the second largest economy in the world. However, the strict capital controls and the annual trade surpluses of trillion dollars have worked against that goal. These limitations are probably also an important obstacle for the development of Stablecoins, market participants have said. Stablecoins are a kind of cryptocurrency that is designed to maintain a constant value. They are usually linked to a Fiat currency such as the US dollar and are often used by crypto traders to move funds between tokens.
The Yuan share as a global payment currency fell to 2.88% in June, the lowest in two years, according to payment platform Swift. The US dollar, on the other hand, ordered a market share of 47.19%.
China places strong capital controls to manage flows in and out of the border, with a few connecting schedules that allow capital to be used in an important offshore market such as Hong Kong.
In the US, President Donald Trump supported Stablecoins days after his inauguration in January and sets up a regulatory framework that helps to legitimize dollar-pegged cryptocurrencies.
Their underlying blockchain technology makes immediate, limitless and 24-hour transfer of funds possible at low costs, giving stabile gestures the potential to disrupt traditional daily money movements and cross-border payment systems.
Financial innovation, in particular Stablecoins, is seen by Beijing as a promising tool for Yuan internationalization in the midst of the growing influence of US dollar-linked cryptocurrencies in Global Finance, the sources said.
Details of the plan are expected to be unveiled in the coming weeks, with Chinese supervisors, including the Central Bank, the People’s Bank of China (PBOC), which are assigned implementation tasks, according to the sources.
The sources refused to be called because they were not authorized to speak with the media.
The Information Office (SCIO) of the State Council did not immediately respond to Reuters requests for comments. The PBOC could not be contacted immediately for comments outside of normal office hours.
Great shift
Stablecoins, supported by the US Dollar, are currently dominating the market, accounting for more than 99% of the worldwide Stablecoin offer, according to the Bank for International Settlements.
In Asia, South Korea has promised to enable companies to introduce won-based Stablecoins and to develop the necessary infrastructure, while similar initiatives are underway in Japan.
The newest push comes in the midst of the mounting of geopolitical tensions with Washington, and the growing use of dollar-supported stablecoins by Chinese exporters.
After a Shanghai regulator last month, the last plans of Beijing come that it had held a meeting for local government officials to consider strategic answers to stablecoins and digital currencies.
In a recent interview, PBOC adviser Huang Yiping told the local media that an offshore Yuan Stablecoin in Hong Kong is “a possibility”.
Separately, the long-awaited Stablecoin regulation of Hong Kong came into force on 1 August and positions Chinese controlled area as one of the first markets worldwide to regulate Stablecoin expenditure supported by Fiat.
The commercial hub of China, Shanghai, also sets up an international operation center for the digital yuan.
According to the sources, Hong Kong and Shanghai will be the most important cities to speed up the local implementation of the latest plan.
China is expected to expand the expansion of the use of Yuan and possibly stablecoins for cross -border trade and payments with some countries at the Shanghai Cooperation Organization (SCO) top that will be held on 31 August. 1 in Tianjin, the sources said.
The Global Stablecoin market is currently small at around $ 247 billion, according to Crypto data provider Coingecko. However, Standard Chartered Bank estimates that it could grow to $ 2 trillion in 2028.
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