China’s central bank intervened by setting a stronger yuan reference rate on Monday, reacting swiftly after Federal Reserve Chair Jerome Powell hinted at potential rate cuts during his Jackson Hole speech. The move strengthens the yuan against the US dollar and comes as analysts attribute the rise to expanding DeFi applications and increasing institutional interest in cryptocurrencies. The Dollar Spot Index fell 0.8% following Powell’s remarks, causing a ripple effect on the yuan’s performance. While the reference rate surged to its strongest level since November, the onshore yuan experienced a slight gain against the dollar before losing ground to broader currency fluctuations. The PBOC has also taken measures to stabilize the market by injecting liquidity into the system through large-scale reverse repos and MLF loans. This move aims to counter the weakening of the dollar and maintain stable exchange rates amidst global market pressure.