China is promoting greater use of the yuan through expanded digital currency initiatives to reflect its economic stature and counter the U.S. dollar's dominance. Limited access to Chinese financial markets and restricted yuan convertibility remain major barriers to broader global adoption. Hong Kong has established stablecoin regulations, and some Chinese experts advocate preparing rules for a possible yuan-pegged stablecoin. Chinese officials did not comment on reports of a State Council plan that might include a yuan stablecoin. In the United States, the administration prioritized crypto-friendly policy and enacted the GENIUS Act to regulate stablecoins. Stablecoins function as fiat-pegged digital means of payment rather than investment instruments.
China has been expanding the use of digital currencies as it promotes wider use of its yuan, or renminbi, to reflect its status as the world's second-largest economy and challenge the overwhelming sway of the U.S. dollar in international trade and finance. However, restrictions on access to Chinese financial markets and limits on convertibility of the yuan, or "people's money," are big obstacles blocking its global use.
Still, Hong Kong already has stablecoin regulations and some Chinese experts are pushing for regulations to prepare for a possible stablecoin pegged to the yuan. Officials at the People's Bank of China and State Council Information Office in Beijing did not immediately respond to requests for comment on a Reuters report that the State Council, or Cabinet, is preparing to issue a plan for internationalizing the yuan that might include a yuan stablecoin.
In the U.S., President Donald Trump has made cryptofriendly policies a priority for his administration. He signed a law, the GENIUS Act, last month regulating stablecoins. How stablecoins work Stablecoins are digital currencies whose value is linked to a specific currency such as the U.S. dollar. They can be used as a substitute in situations where currency transactions might be difficult or costly.
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