Jeremy Allaire, CEO of Circle, told Reuters in Hong Kong that there is huge potential for a Chinese yuan-backed stablecoin. Allaire predicted that China could develop its own stablecoin in the next three to five years, at a time when digital currencies will become more integrated into the global trade and financial system.
Expectation of a new stablecoin move from China
Recent developments indicate that the issue is no longer just a speculative idea but has become more compatible with Beijing’s monetary policies. According to Reuters in August 2025; Chinese officials have made some considerations about increasing international acceptance with a yuan-based stablecoin. This approach marks a remarkable shift for China, which has banned crypto asset trading and mining since 2021.
Jeremy Allaire first raised the issue in 2023 and argued that stablecoins could be more effective in the internationalization of the RMB (Chinese yuan) compared to China’s central bank digital currency. Beijing’s stance was decidedly negative at the time; Authorities detained people associated with offshore yuan-linked stablecoin CNHC and re-emphasized restrictions on virtual currencies at the end of the year.
“Stablecoins are now seen as part of the financial infrastructure for cross-border payments rather than speculative crypto products.”
China’s great transformation: Uncertainty in the decision axis
Experts say Beijing needs to make its currency fully convertible before it can launch a yuan stablecoin. In other words, foreign investors and markets should be able to buy and sell the yuan freely, and current restrictions on capital movements should be removed.
If the yuan is not fully convertible, it seems technically impossible to implement a stablecoin. Today, capital controls, one of the fundamental pillars of the Chinese economy, are maintained strongly. While stablecoins backed by offshore yuan (CNH) can find a place in the current system, a stablecoin based on onshore yuan (CNY) requires a comprehensive structural change.
Global stablecoin competition
Allaire’s three- to five-year timeline depends on whether China approaches stablecoins as a temporary solution or a long-term commitment. Although rapid advances are being made on the technology side, all processes ultimately rely on policy decisions.
According to current data, the size of the stablecoin market worldwide has reached 315 billion dollars. The biggest share in this cake is private sector tokens indexed to the dollar, such as Tether and USD Coin.
“As a result, the timing of the policy process is much slower than technological development.”
