China considering yuan-backed stablecoins to boost global currency usage

China is considering the introduction of yuan-backed stablecoins to increase global adoption of its currency. The State Council plans to approve a roadmap this month to enhance the yuan's use internationally and address the dominance of the U.S. dollar. Stablecoins, crucial for financial innovation, could help the yuan achieve global currency status, despite existing capital controls that present challenges.

China's leadership will meet to discuss this strategy, which includes risk prevention guidelines and implementation duties for regulators. Hong Kong and Shanghai will lead local efforts. Beijing aims to expand yuan usage in cross-border trade, with discussions at the upcoming Shanghai Cooperation Organisation Summit.