In a potential policy shift, Chinese officials have directed state-owned enterprises to begin exploring the feasibility of issuing stablecoins backed by the Chinese yuan. Reports on Feasibility Commissioned by Central State Actors The guideline is focused on fintech innovation-oriented digital service firms and financial institutions, including Shanghai Data Group and Guotai Haitong. They are instructed to study the means of stablecoin issuance on the yuan basis as well as consider starting pilot programs. The move follows a meeting last week by the Shanghai State-owned Assets Supervision and Administration Commission (SASAC), where Director He Qing stressed the need for state firms to embrace digital transformation and innovation of financial infrastructure. China’s latest actions may signal a softening of its hard-line history stance toward digital tokens. Government officials are now urging state-owned firms to research how blockchain can assist in creating sectors like cross-border payments, supply chain lending, and asset tokenization. He Qing stated, “State-owned assets and state-owned companies will play a bigger role in scientific and technological innovation, adjustment of industrial mix, and security support.” Global Stablecoin Pressure This step follows as there is mounting pressure from global events in stablecoin adoption and regulation. On July 10, Chinese regulators convened to rethink their positions following the rapid growth of stablecoin use across the world. The Senate has already approved the drafted GENIUS Act in the United States and awaits a vote in the House. Hong Kong is to enact the Stablecoin Ordinance on August 1, which will bring in a licensing regime for HKD-backed stablecoins. The EU had prior to that applied its MiCA structure to govern issuers of stablecoins within the bloc. China’s Next Digital Currency Move? China has already taken a leadership role in developing central bank digital currencies (CBDC) with the digital yuan. But the testing of privately issued, yuan-pegged stablecoins marks a new chapter in its digital finance initiative, driven by competitive necessities in the evolving global monetary system.
