A stablecoin that preserves convertibility and compliance could support invoicing and settlement in regional trade corridors, while design choices around custody, redemption, and reserve composition would drive market uptake and regulatory comfort.
Operational design matters more than labels. An offshore yuan stablecoin could be structured with ring-fenced reserves and clear redemption rules, then used for cross-border trade settlement, treasury, and market-making.
Onshore convertibility would remain governed by quota systems and banking controls. Market participants will parse how responsibilities are divided among the PBOC, securities and banking regulators, and local authorities in Hong Kong and Shanghai..
The policy sequence is straightforward. Hong Kong’s ordinance comes into force, issuers prepare applications, mainland authorities set parameters for permitted uses and supervision, and cross-border pilots are coordinated around trade flows and financial centers. The State Council review later in August sets the next steps.
