China needs yuan-backed stablecoins ‘sooner rather than later', state media urges Beijing
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Securities Times, a publication under party mouthpiece People's Daily, said experts and industry insiders 'generally believe that, as an emerging payment tool, the unique advantages and potential risks of stablecoins cannot be ignored, and that the development of [yuan-backed] stablecoins should be sooner rather than later'.
Unlike highly volatile cryptocurrencies such as bitcoin and ethereum, stablecoins anchor their values to a fiat currency or other reserve assets, and are meant to combine the efficiency of cryptocurrencies with the reliability of traditional money.
While allowing stablecoins to proliferate without regulations would harm the country's financial system, forgoing such an efficient settlement tool could mean missing a golden opportunity for the yuan, the article warns.
'For China, which is promoting the global use of the yuan, proactively regulating stablecoins and therefore facilitating the internationalisation of the yuan might be a better solution,' the piece said.
Stablecoins reduce the capital and time costs ... making cross-border transactions more convenient
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