China recently banned unauthorized offshore yuan stablecoin issuance while continuing to promote its state-backed e-CNY digital currency. Meanwhile, US dollar-backed stablecoins are still dominant, with dollar-pegged tokens making up 99.8% of fiat-backed stablecoins.
Circle CEO Backs Yuan Stablecoin
Circle CEO Jeremy Allaire says China has a major opportunity to expand the global use of the yuan through a yuan-backed stablecoin, despite Beijing’s firm restrictions on privately issued renminbi-linked digital tokens. In Hong Kong, Allaire argued that stablecoins could help China “export” its currency by making international payments faster and easier, and suggested such a product could become a reality in the next three to five years.
Jeremy Allaire
His comments were made in light of the growing geopolitical contest in digital finance, where influence over global money flows is shaped by technology as well as central bank policy. The big question is whether countries that reject private digital currencies may eventually need them to stay competitive in international trade and finance.
China has taken the opposite approach so far. In February, the People’s Bank of China and seven other agencies declared unauthorized offshore issuance of yuan-pegged stablecoins to be illegal financial activity. Regulators also introduced tighter scrutiny for tokenized domestic real-world assets. Officials said the measures were necessary to protect financial stability, prevent capital flight, and defend monetary sovereignty.
These policies align with Beijing’s preference for its state-controlled digital currency, the e-CNY, rather than privately issued stablecoins. China also consistently reaffirmed its 2021 ban on crypto trading and mining, and in late 2025 the central bank said it would intensify enforcement against stablecoins.
Meanwhile, dollar-backed stablecoins still dominate the global market. In fact, Circle’s USDC grew 72% year-on-year to $75.3 billion in circulation by the end of 2025.
Circle 2025 financial results
Allaire also pointed out that billions of dollars in additional USDC transactions occurred during the US-Iran conflict, as users turned to portable digital dollars during a period of uncertainty.
According to Outlier Ventures, US dollar-backed stablecoins represented 99.8% of all fiat-backed stablecoins in 2025.
US Dollar stablecoin issuer dominance (Source: Outlier Ventures)
While Beijing is still very much focused on promoting the e-CNY, the long-term challenge may be whether a tightly controlled state-led model can compete with the speed, flexibility, and international reach of privately issued digital currencies.
