China has banned the export of unapproved yuan-peg stablecoins to maintain foreign exchange stability.
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Chinese regulators have moved to tighten controls on digital assets, banning unauthorized outflows of yuan-peg steelcoins overseas and extending restrictions on real-world assets tied to the country's currency.
Key Takeaways:
China bans unauthorized yuan-peg stotocoins and related tokenized assets to protect monetary sovereignty.
Officials reaffirmed crypto payment bans while promoting government-backed digital yuan.
Japan and Hong Kong are moving toward more stable coin markets, reflecting the regional policy divide.
The People's Bank of China (PBOC) and seven government agencies said in a joint statement on Friday that individuals and companies cannot issue stablecoins linked to the renminbi without official recognition.
Officials have argued that such signals mimic the key functions of the currency and could threaten monetary sovereignty.
China Says Yuan Stablecoins Threaten Currency Stability
Stablecoins are tied to fiat currencies and “perform some of the functions of fiat currency,” the announcement said, warning that unregulated circulation could destabilize the yuan.
The regulations target services linked to tokenized financial assets, including blockchain-based representations of bonds or shares.
Overseas entities are prohibited from supplying related products to users in China without approval from regulators.
Beijing has reaffirmed its long-standing stance on crypto payments, stating that assets such as bitcoin and ether do not hold the status of legal tender and that facilitating transactions or related services is illegal.
The policy will be developed in Introduced by the central bank in 2021, cryptocurrency trading and payments were successfully removed from the domestic financial system.
Winston Ma, a legal scholar and former sovereign wealth fund executive, said the bans would apply to both onshore and offshore versions of the renminbi.
The offshore yuan, known as CNH, is designed for foreign exchange flexibility while maintaining capital controls.
The moves appear to fit a broader strategy to curb privately issued digital currencies while promoting a government-backed digital yuan.
China has spent several years developing the e-CNI central bank digital currency and recently allowed commercial banks to share interests with users who carry digital yuan wallets to increase adoption.
Japan, Hong Kong Adopt Stablecoin Regulation China Tightens Laws
Elsewhere in Asia, policymakers have taken a different approach. Japan has introduced a legal framework for stablecoin issuance by 2023, while Hong Kong plans to license stablecoin issuers this year.
China had tested allowing private companies to issue yuan-peg tokens by 2025, but later halted the pilot program.
Last year, the People's Bank of China unveiled a framework that would allow commercial banks to charge interest on balances held in digital yuan wallets starting January 1, 2026.
Lu Li, deputy governor of the PBOC, said the change would move e-CNN beyond its original role as a digital version of cash and integrate it into banks' asset and liability operations.
Global stablecoin transaction value will reach $33 trillion by 2025, according to Bloomberg data compiled by Artemis Analytics.
USDC emerged as the most used stablecoin, handling $18.3 trillion, while Tether's USDT handled $13.3 trillion, despite holding the lead in market capitalization at $187 billion.
The surge in activity follows the passage of the Genius Act in July 2025, the first comprehensive US regulatory framework for payment stablecoins.
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