China Blocks Yuan Stablecoin Issuance Amid e-CNY Growth
The People's Bank of China has issued a clear directive on the issuance of yuan-denominated stablecoins, effectively banning them without explicit government approval. The notice, known as Notice No. 42, was released in February 2026 and builds upon previous regulatory frameworks established by Chinese authorities.
The ban applies to both onshore and offshore issuances, including those through Hong Kong, where speculation had swirled about the potential for yuan-backed stablecoins from major players like Ant Group and JD.com. The PBOC intervened before any such products could gain traction, effectively halting plans for yuan-related stablecoin issuance.
The notice also reinforces the government's stance on private virtual currencies, reiterating that they carry no legal tender status in China. In contrast, the cumulative e-CNY transaction volume reached approximately 16.7 trillion yuan by the end of November 2025, with interest-bearing features for e-CNY accounts launching in January 2026 to incentivize adoption.