Divya Delhi:A major change is brewing in China, where the possibility of introducing stablecoins backed by the yuan is being consideredto increasee the international use of the country's currency. In an effort to challenge the dollar's hegemony in the digital asset market, the State Council, China's cabinet, is expected to examine a plan that incorporates a push on stablecoins. In addition to outlining regulatory duties and providing recommendations for risk mitigation, the proposed strategy would establish goals for the foreign usage of the yuan. There has been a dramatic about-face from China's 2021 prohibition on cryptocurrency trade and mining, which was enacted in response to worries about financial stability. This comes at a time when the yuan's market share in international payments is at a two-year low of 2.88%, significantly lower than the 47.19% market share held by the US dollar. One way to expand the yuan's global reach could be through stablecoins, which are cryptocurrencies linked to a fiat currency. These coins provide low-cost, quick, and borderless transfers. Hong Kong and Shanghai have been chosen as the main locations to expedite the plan's execution, and senior Chinese authorities are likely to convene to review the proposal.People perceive this endeavor as a deliberate reaction as geopolitical tensions rise and dollar-backed stablecoins gain traction in global banking..