China Bans Offshore Yuan Stablecoins

China Bans Unapproved Overseas Issuance of Yuan-Linked Stablecoins

• Beijing has prohibited the issuance of yuan-pegged stablecoins overseas without lawful approval from relevant authorities.
• The directive, issued by eight departments including the People’s Bank of China and China Securities Regulatory Commission, aims to mitigate risks from virtual asset speculation.
• The notice emphasizes that unauthorized stablecoin activities could threaten financial security through money laundering and cross-border capital risks.
• It reiterates that virtual currencies like Tether lack legal tender status, classifying related business activities as illegal financial actions.
• China’s central bank is promoting its digital yuan, e-CNY, as a state-backed alternative to private stablecoins, with interest on e-CNY wallets available from January 1, 2026.

China’s regulatory move against unapproved yuan-linked stablecoins underscores its commitment to maintaining monetary sovereignty and financial stability amid a rapidly growing global stablecoin market. The introduction of interest on e-CNY wallets further highlights China’s focus on promoting its official digital currency over private alternatives.