Circle CEO Jeremy Allaire says there is “tremendous opportunity” for a yuan-backed stablecoin, despite China’s restrictions on private renminbi-linked tokens and its push for a state-backed digital currency.
Speaking to Reuters in Hong Kong on Thursday, Allaire suggested stablecoins could help China expand the global use of its currency by making cross-border payments more efficient. He added that a yuan-backed stablecoin could emerge within three to five years as digital finance becomes more embedded in global trade.
His comments highlight a broader question: whether governments that restrict private digital currencies can remain competitive in a financial system increasingly shaped by tokenization.
China’s stance contrasts with rising global demand for stablecoins as payment tools. In February, the People’s Bank of China and several other agencies declared that unauthorized offshore issuance of yuan-pegged stablecoins would be treated as illegal financial activity, while also tightening oversight on tokenized real-world assets.
Officials said the measures are aimed at protecting financial stability, preventing capital outflows, and maintaining monetary sovereignty, as China continues to promote its central bank digital currency, the e-CNY. The policy effectively limits most offshore RMB stablecoin activity, even as earlier reports suggested China was exploring such tokens to boost international adoption of the yuan.
Digital dollars still dominate stablecoins
Allaire’s remarks come as stablecoins play an increasingly strategic role in global finance. Circle’s US dollar-backed USDC grew 72% year-over-year to reach $75.3 billion in circulation by the end of 2025. He noted that “several billion dollars” in additional USDC transactions occurred following the outbreak of the US-Iran conflict, as users turned to digital dollars during a period of uncertainty.
A 2025 report from Outlier Ventures found that US dollar-backed stablecoins made up 99.8% of all fiat-pegged stablecoins, highlighting the market’s overwhelming reliance on digital dollars over alternatives tied to other national currencies.
In contrast, China continues to prioritize a central bank digital currency (CBDC)-first approach. Authorities have repeatedly reinforced their 2021 ban on crypto trading and mining, and in November 2025, the central bank signaled plans to intensify its crackdown on stablecoins. This led to a February directive banning most RMB-linked stablecoin issuance and restricting real-world asset tokenization without prior approval, as Beijing pushes the e-CNY as its preferred path for digital yuan adoption.
