Circle CEO Jeremy Allaire said on April 16, 2026, that a yuan stablecoin remains likely despite China’s tight stablecoin regulation. Speaking to Reuters in Hong Kong, he highlighted growing global demand for digital payment systems.
Allaire said a yuan stablecoin could emerge within three to five years as digital currency competition intensifies. He added that stablecoins could expand China’s currency use in global trade networks.
Stablecoins have been declared illegal in China and have been seen as unauthorized financial activity. The Chinese government has recently taken steps to begin regulating real-world asset tokenization in local markets and has also restricted the issuance of yuan-backed tokens from outside China.
According to him, this was done so the government could ensure financial stability as well as avoid capital leaving China. China continues to prioritize the development of its e-CNY (digital yuan) over the development of privately-issued yuan stablecoins. The e-CNY is expected to remain the centerpiece of China’s tightly controlled digital currency strategy.
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Allaire expressed his opinion that stablecoins will take on a bigger role as an underlying infrastructure for facilitating cross-border payments. As tensions among nations increase, the reliability and availability of digital liquidity for consumers increase.
By the end of 2025, Circle’s USDC had exceeded $75 billion in circulation. Dollar-backed stablecoins currently represent nearly all of fiat-pegged digital assets in existence today.
This trend illustrates the dominant position of the US dollar in existing digital finance systems. However, if a yuan stablecoin is created, it could create changes to cross-border settlement mechanisms.
In a 2025 report published by Outlier Ventures, dollar-backed stablecoins represented approximately 99.8% of fiat-pegged stablecoins available. In contrast, the Central Bank of China is continuing down its path of CBDC-first strategies, which supports its development of the digital yuan while limiting private stablecoin development.
Allaire also said that digital currency will alter how nations are able to exert financial power across the globe. China’s stablecoin regulations represent a fine line between enabling financial innovation and maintaining central bank control. This delicate balance reflects Beijing’s broader strategy to oversee capital flows while selectively embracing digital finance.
The strictness of the regulation can be detrimental to encouraging private sector innovations. However, it will allow for continued supervision on the part of regulators.
The emergence of a yuan stablecoin is possible and is likely to occur when there is growing interest in non-US-dollar alternatives to settle international transactions.
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