China’s State Council is set to review a new plan this month that aims to increase the international use of its yuan through stablecoins. The initiative specifically targets Hong Kong and Shanghai as testbeds for local implementation, where they will play critical roles in launching digital yuan-backed stablecoins. This marks a significant shift in China’s stance on digital assets after previously banning cryptocurrency trading and mining in 2021. Stablecoins, cryptocurrencies tied to real-world assets like national currencies, are expected to be integral to improving cross-border transactions by leveraging blockchain technology for faster and cheaper transfers. This plan also addresses risk mitigation strategies, aligning with China’s aim of elevating the yuan’s global status through stablecoin use cases. The initiative is expected to receive discussion at an upcoming summit in Tianjin, highlighting its geopolitical significance. The global stablecoin market currently stands at approximately $247 billion, projected to grow significantly over the next few years.