Circle CEO Jeremy Allaire says there is “tremendous opportunity” for a yuan-backed stablecoin, even as Beijing has formally moved against most private renminbi-linked stablecoins while advancing its own digital yuan.
Speaking to Reuters in Hong Kong, Allaire described stablecoins as a tool for China to “export” its currency by making global payments easier as digital money becomes more integrated with trade and finance. He suggested the country could introduce a yuan-backed stablecoin within three to five years.
The comments underscore a larger question: can governments that restrict private digital currencies afford to ignore them if they want to remain competitive in international payments? China’s recent crackdown contrasts with rising demand for stablecoins as cross-border payment instruments and complicates how the yuan might adapt in a tokenized financial system.
In February, the People’s Bank of China and seven other agencies declared unauthorized offshore issuance of yuan-pegged stablecoins illegal and said tokenization of domestic real-world assets would face tighter scrutiny. Officials framed those steps as protecting financial stability, preventing capital flight and safeguarding monetary sovereignty while promoting the e-CNY. The move effectively shuts down most offshore RMB stablecoins, coming months after reports that China had considered yuan-backed tokens to boost its currency’s global use.
Digital dollars still dominate stablecoins
Allaire’s remarks come as stablecoins take on geopolitical significance. Circle’s US 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 occurred after the outbreak of the US-Iran war, as people sought portable digital dollars during a crisis.
A 2025 report from Outlier Ventures found dollar-backed stablecoins made up 99.8% of all fiat-denominated stablecoins, highlighting the market’s heavy reliance on digital dollars rather than tokens pegged to other national currencies.
China, by contrast, is pursuing a CBDC-first strategy, repeatedly reinforcing its 2021 ban on crypto trading and mining. In November 2025 the central bank warned it would intensify its crackdown on stablecoins, leading to February’s notice banning most RMB-linked stablecoin issuance and restricting RWA tokenization without prior approval, as Beijing pushes the e-CNY as its preferred path for digital yuan adoption.
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