PBoC Op-Ed Pushes Use Case for Yuan-Pegged Crypto Stablecoins

A researcher from the People's Bank of China voiced support for yuan-pegged stablecoins in an op-ed published Tuesday.

AccessTimeIconOct 10, 2018 at 4:30 a.m. UTC
Updated Sep 13, 2021 at 8:28 a.m. UTC
10 Years of Decentralizing the Future
May 29-31, 2024 - Austin, TexasThe biggest and most established global hub for everything crypto, blockchain and Web3.Register Now

China should increase its research efforts on the topic of stablecoins and consider backing domestic institutions issuing yuan-pegged cryptocurrencies, a researcher from the People's Bank of China (PBoC) argues.

The comments come in an op-ed piece published Tuesday by CN Finance, a bi-weekly magazine and a mouthpiece of the Chinese central bank, and co-authored by Li Liangsong, PBoC researcher and a professor from China's Fudan University.

The article – titled "A Brief Analysis of Stablecoins" – explores the recent development of stablecoins globally, with most so far having been anchored to the U.S. dollar, including some backed by regulators such as the Gemini Dollar (GUSD) and Paxos Standard.

The authors go on to argue that the development of USD-pegged cryptocurrencies will strengthen the dominant role of the dollar in the global monetary system, but could have a negative effect on other major fiat currencies.

"If the U.S. dollar-pegged stablecoins can eventually be widely recognized by the market and can prove their use in the real economy, we should double down on our research efforts [on the issue] and learn from relevant experience to support domestic institutions to issue yuan-pegged crypto stablecoins," the authors state.

Seemingly echoing that point, crypto exchange OKCoin's founder, Star Xu, said on Wednesday in a Weibo post that he believes the "Trend of issuing a Chinese yuan stablecoin is inevitable. And OKCoin USA will participate in rolling out a regulated stablecoin."

That said, the authors of the CN Finance article also pointed out there's still a long way to go before stablecoins can make a real impact on worldwide economies.

"If stablecoins can scale eventually, the role of central banks could be in a dilemma. Fiat currencies issued by central banks will become collateral to back stablecoins, but will not end up in the market circulation. That will limit the role of central banks in payment settlements and monetary policies," the authors say.

They conclude:

"The evolution of this monetary system will likely be eventually achieved by a central bank-issued fiat digital currency."

Chinese yuan image via Shutterstock


Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

CoinDesk is an award-winning media outlet that covers the cryptocurrency industry. Its journalists abide by a strict set of editorial policies. In November 2023, CoinDesk was acquired by the Bullish group, owner of Bullish, a regulated, digital assets exchange. The Bullish group is majority-owned by Block.one; both companies have interests in a variety of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin. CoinDesk operates as an independent subsidiary with an editorial committee to protect journalistic independence. CoinDesk employees, including journalists, may receive options in the Bullish group as part of their compensation.

Learn more about Consensus 2024, CoinDesk's longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Head to consensus.coindesk.com to register and buy your pass now.