Jeremy Allaire, CEO of Circle, says there is a “tremendous opportunity” for a yuan-backed stablecoin and that China could roll one out within three to five years. The prediction is striking given the context: China banned crypto in 2021, and as recently as February this year, regulators explicitly outlawed offshore yuan stablecoins without approval. What stands in the way is not technology. It is policy.
What’s at stake in the stablecoin race
Allaire made the remarks in a Reuters interview in Hong Kong on Thursday. His argument: stablecoins have become a way for currencies to gain global reach, and China risks being shut out. “If there’s currency competition, you want your currency to have the best features possible,” he said. “This is becoming a technological competition.”
The global stablecoin market is now worth nearly $315 billion, almost entirely in dollar-pegged tokens. Circle’s USDC grew 72% year-on-year to $75.3 billion by the end of 2025. Allaire noted several billion dollars in additional USDC volume after the U.S.-Iran war broke out, as people moved into portable digital dollars. The yuan barely registers. That is the gap
China’s mixed signals on the yuan stablecoin
Inside China, the idea has picked up real support. In July 2025, Ant Group and JD reportedly pushed the People’s Bank of China to authorize yuan-backed stablecoins alongside Hong Kong dollar versions. Reuters reported the following month that officials were actively exploring the concept.
Then came the formal no. In February 2026, the PBoC and a group of regulators banned the offshore issuance of yuan stablecoins without prior regulatory approval. “Without approval from relevant authorities, no domestic or foreign entity or individual may issue yuan-pegged stablecoins offshore,” the notice said.
The yuan convertibility problem
Even a political shift would not solve the deeper issue. For a yuan stablecoin to function as a global payments instrument, the Yuan would need to be fully convertible, meaning foreigners could move yuan freely. China’s capital controls, in place for decades, prevent exactly that.
One workaround exists on paper: a stablecoin backed by the offshore yuan (CNH), which trades freely in Hong Kong and other markets, could fit within the current system. A stablecoin backed by the onshore yuan (CNY) could not. Allaire’s three-to-five-year window depends on which version Beijing is willing to build. That, in turn, depends on how much economic openness Beijing is prepared to accept. That is not a technology question.
