Reuters' exclusive report hit like a bombshell, causing a stir in the global financial community. The State Council of China is about to review the internationalization roadmap for the yuan stablecoin, and this is not a minor issue; it is a direct confrontation with the dollar in the digital currency field. It should be noted that currently, dollar stablecoins account for 99% of the global market share, almost monopolizing the entire market. China's move this time clearly aims to break this monopoly.
The most surprising thing is China's 180-degree turn in attitude. Back in 2021, China was extremely strict about cryptocurrencies, banning mining and trading altogether. Now, suddenly wanting to create a yuan stablecoin indicates that the strategic considerations behind this are not simple. Simply put, China has realized one thing: the pie of digital currency is too large to let the United States monopolize it. Standard Chartered Bank predicts that by 2028, the global stablecoin market could reach $2 trillion; with such a large market, how could China possibly stand by idly?
Hong Kong and Shanghai have been selected as pilot cities, and this arrangement is quite sophisticated. Hong Kong, as an international financial center, has a complete regulatory framework, and the stablecoin regulations that just took effect on August 1 have made it one of the first places in the world to regulate fiat stablecoins. Shanghai, on the other hand, is at the forefront of China's financial reform and is building an international digital yuan operation center. The two cities, one internal and one external, form a perfect combination.
However, to be honest, for the yuan stablecoin to shake the dollar's position is no small feat. SWIFT's data shows that in June, the yuan's share of global payments was only 2.88%, hitting a two-year low, while the dollar still accounted for 47.19%. Additionally, China's capital controls do pose a problem for the yuan's free liquidity. That said, China has a trade surplus of several trillion dollars each year; if these transactions were all settled in yuan stablecoins, the influence would be considerable.
The most interesting part is that China may discuss this matter with member countries at the Shanghai Cooperation Organization summit at the end of August. This move is quite clever, starting with friendly countries to establish usage scenarios for the yuan stablecoin, and then gradually expanding its influence. Although it is difficult to shake the dollar's position in the short term, this beginning is of great significance; the global stablecoin market landscape is about to change.