Chinese policymakers are weighing the creation of a regulatory framework that would let companies issue and trade yuan-backed stablecoins, signalling a potential break with the mainland’s years-long ban on private cryptocurrencies. Officials in Shanghai, a frequent test bed for financial reforms, have begun publicly discussing stablecoins and other digital assets, according to Caixin and other local reports. Momentum for change has grown since Washington and several other jurisdictions adopted oversight regimes that legitimise dollar-denominated stablecoins, threatening to deepen the greenback’s dominance in cross-border payments. Mainland companies such as Ant Group and JD.com are already seeking licences in Hong Kong, which now allows non-Hong Kong-dollar stablecoins, to issue offshore tokens pegged to the yuan while keeping capital controls intact. Beijing has until now focused on rolling out the central bank-issued e-CNY for domestic use, but analysts say a parallel yuan stablecoin could boost the currency’s international role and keep China competitive in digital finance. The global stablecoin market is valued at roughly $260 billion, with more than 99% tied to the U.S. dollar, underscoring what is at stake for Chinese officials debating the shift. The deliberations come as other major economies craft sovereign responses to private digital tokens. The European Central Bank this week promoted its planned digital euro as a “sovereign, free-to-use” alternative aimed at curbing the influence of foreign-backed stablecoins.