SHANGHAI, Aug 21 (Reuters) - Mainland China stocks advanced on Thursday, with the Shanghai benchmark hitting its highest in a decade, driven by heavy gains in fintech and stablecoin-concept shares after a Reuters report signalled a major shift in Beijing's stance on digital assets.

** At the midday break, the benchmark Shanghai Composite index .SSEC was up 0.35% at 3,779.52 points, the loftiest intraday peak since August 2015, while China's blue-chip CSI300 index .CSI300 was up 0.71%.

** Fintech and stablecoin-concept shares were among the biggest winners in morning deals, after Reuters reported, citing sources, that China is considering allowing the usage of yuan-backed stablecoins for the first time to boost wider adoption of its currency globally.

** China's plan for the usage of stablecoins, if approved, would mark a major shift in its approach towards digital assets. The country banned cryptocurrency trading and mining in 2021 due to concerns about the stability of the financial system.

** The CSI Fintech Theme index .CSI930986 jumped 2.1%, while Brilliance Technology Co 300542.SZ rose the exchange-allowed maximum of 20% and Tansun Technology Co 300872.SZ leapt 9.02%.

** Chinese shares have been rising, supported by easing trade tensions between the world's two largest economies and improved liquidity conditions, and as investors shift out of bonds and into stocks, traders and analysts said.

** James Wang, head of China strategy at UBS Investment Bank research, said rising retail participation could be one of the drivers underpinning the recent stock rally.

** "Retail flows may have been one of the drivers with trading volume up 80% year-on-year on the A-share and margin financing balance outstanding also rising sharply," Wang said.

"As retail participation typically increases following stronger performances for the A-shares, it would seem that A-share offers better upside potential."

** In Hong Kong, the benchmark Hang Seng Index .HSI was down 0.1% at 25,140.96 points, while the Hang Seng China Enterprises Index .HSCE fell 0.32% to 8,984.22 points.

** Around the region, MSCI's Asia ex-Japan stock index .MIAPJ0000PUS was firmer by 0.34% while Japan's Nikkei index .N225 was down 0.63%.

(Reporting by Shanghai Newsroom; Editing by Mrigank Dhaniwala)