He said that if China wants the yuan to stay competitive, it needs the technology to match.
Stablecoin News
Circle CEO Jeremy Allaire said Thursday that a yuan-backed stablecoin represents a major untapped opportunity for China. He made the comments in an interview with Reuters in Hong Kong. Allaire said China could launch such a token within three to five years.
Allaire framed stablecoins as a new channel through which national currencies compete for global relevance. He said that if China wants the yuan to stay competitive, it needs the technology to match. "This is becoming a technological competition," he told Reuters.
China's current regulatory stance points in the opposite direction. In February 2026, the People's Bank of China and seven other agencies banned the offshore issuance of yuan-pegged stablecoins without prior regulatory approval. Authorities described unauthorized issuance as illegal financial activity and said the restriction was necessary to protect financial stability and limit capital flight.
The February notice built on earlier signals. In November 2025, the central bank warned it would step up its crackdown on stablecoins. That followed July 2025 reports that Ant Group and JD had separately urged the central bank to authorize yuan-backed tokens alongside those already pegged to the Hong Kong dollar.
Beijing has instead pushed its central bank digital currency, the e-CNY, as its preferred model for digital yuan adoption. Mainland China continues to ban crypto trading entirely. Hong Kong has moved in a different direction, with the Hong Kong Monetary Authority issuing its first stablecoin licenses last week to HSBC and Anchorpoint Financial, a joint venture involving Standard Chartered, Animoca Brands, and Hong Kong Telecommunications.
Circle's dollar-backed USDC grew 72% year-on-year to $75.3 billion in circulation by the end of 2025. Allaire told Reuters that several billion dollars in additional USDC transactions were recorded following the outbreak of the U.S.-Iran conflict, as users sought portable digital dollars. Outlier Ventures reported in a 2025 study that U.S. dollar-backed stablecoins made up 99.8% of all fiat-denominated stablecoins globally.
Allaire's remarks arrive as stablecoins become a direct instrument of currency competition. Whether Beijing moves toward a private yuan stablecoin or holds firm on the e-CNY as its only digital currency model will shape how the yuan competes in cross-border payments and tokenized finance.
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