According to a Wednesday report by Reuters, China is considering greenlighting yuan-pegged stablecoins that could be used globally.
The possible reversal has been prompted by the U.S. fully embracing the nascent sector.
A roadmap, which is on track to be approved later this August, will be focused on promoting greater yuan usage around the globe, and stablecoins are expected to be a prominent part of it.
Warming up to crypto?
China has long been one of the most anti-crypto jurisdictions around the globe.
As reported by U.Today, unsubstantiated rumors of China banning Bitcoin started circulating yet again on social media earlier this month.
After initially cracking down on institutional usage of Bitcoin back in 2013, China then intensified its anti-crypto clampdown in 2017 by banning initial coin offerings (ICOs) and pushing local exchanges offshore.
In 2021, the Chinese government banned Bitcoin mining, delivering an enormous blow to the country's thriving industry. Despite the ban, China continues to control 21% of global hashrate.
That said, it should be noted that China has piloted its own central bank digital currency (digital renminbi) while Hong Kong recently crafted a licensing regime for stablecoins.
The potential approval of yuan-backed stablecoins could be a major sign that the second-biggest economy is now warming up to crypto.
Strengthening US dollar
Earlier this year, the U.S. Congress moved to pass the Genius Act, which was then signed into law. The ambitious legislative proposal, which was hailed as a massive win for the crypto lobby, establishes a comprehensive regulatory framework for the stablecoin industry.
As reported by U.Today, Treasury Secretary Scott Bessent previously estimated that dollar-pegged stablecoins could potentially result in up to $2 trillion worth of demand for US Treasuries.
Bessent, a strong proponent of crypto, views stablecoins as a generational opportunity to expand the dominance of the U.S. dollar.
