China is working on a new plan to make its currency — the yuan — more widely used in international markets. For the first time, the country is considering allowing the use of yuan-linked “stablecoins” (stable cryptocurrency). This marks a sharp shift from China’s previously strict policy on digital assets.
Today, most international trade is conducted in dollars. If a yuan-based stablecoin is introduced, companies and banks will be able to work directly with the yuan instead of the dollar.
The Chinese government may review and approve the draft of this plan by the end of this month. It is expected to outline objectives, regulations, and security measures for the use of yuan-based digital assets.
China banned cryptocurrency trading in 2021. Now, however, it is said that with the help of stablecoins (stable cryptocurrency), the yuan could gain wider use in the international financial system. This is because dollar-based stablecoins currently dominate the market and have a major influence on global financial flows.
In addition, the new plan is expected to be implemented quickly in Hong Kong and Shanghai. These regions are seen as key hubs for developing international operations with the yuan and digital currencies.
According to experts, with the help of stablecoins, the yuan could become a fast, cheap, and borderless means of payment. This would serve China’s goal of reducing its reliance on the dollar and strengthening its position as a global currency.
Read 'Zamin' on Telegram!
