China considers yuan-backed stablecoins to boost global use of the currency.
China is considering allowing the use of yuan-backed stablecoins for the first time to promote wider adoption of its currency globally, sources familiar with the matter said, in a major reversal of its stance on digital assets.
The State Council - China's cabinet - is set to review and possibly approve a roadmap this month for greater use of the currency worldwide, including matching the support from the United States for stablecoins, the sources said.
The plan is expected to include targets for the use of the Chinese currency in global markets and outline the responsibilities of national regulatory bodies, they said, adding that the roadmap will also include guidelines for risk prevention.
The country's leadership is also expected to convene for a study session later this month, focusing on the internationalization of the yuan and stablecoins, which are gaining traction worldwide, one of the sources said.
During this meeting, the leaders are likely to make comments to set the tone for stablecoins and define the limits of their application and development in business, the source said.
China's plan for the use of stablecoins, if approved, would mark a significant shift in its approach to digital assets. The country banned cryptocurrency trading and mining in 2021 due to concerns about financial system stability.
For a long time, China has aspired for the yuan to achieve global currency status, similar to the dollar or euro, reflecting its weight as the world's second-largest economy. However, its strict capital controls and annual trade surpluses in the trillions of dollars have worked against this goal.