China may approve yuan-backed stablecoins, signaling a major policy shift that could challenge dollar dominance and reshape global fintech and payments.

China is considering launching a yuan-backed stablecoin to strengthen the currency’s global influence. The timing aligns with U.S. progress on regulated stablecoins, intensifying competition for leadership in global digital payments. China may be on the verge of a major shift in its digital asset policy.

China's cabinet is weighing approval of a stablecoin backed by the yuan as part of a broader effort to expand the currency's global use and bolster its role in international markets, according to a media report published Wednesday.