China’s JD.com and Ant Group are advocating for the issuance of yuan-based stablecoins to counter the emergence of digital currencies linked to the U.S. dollar, as reported by Reuters.
Key Points:
- Both firms are calling on the central bank to allow for the launch of these stablecoins.
- They aim to bolster the usage of the offshore yuan in Hong Kong as a strategy to enhance the currency’s global presence.
- JD.com and Ant Group are set to introduce Hong Kong dollar-backed stablecoins once local legislation is enacted starting August 1.
However, JD.com wants to push for offshore yuan stablecoins as part of a broader initiative to increase the yuan’s internationalization. This move aligns with China’s goal to rival U.S. dominance in the digital finance sector and extend the reach of its currency.
Despite having significant plans, it’s crucial to note that China maintains a longstanding prohibition on cryptocurrency transactions that also encompasses most private stablecoins. This ban escalated noticeably in 2021 due to concerns around financial crime, capital flight, and overall financial stability risks.
To mitigate these issues, China has heavily invested in the development and testing of its digital yuan (e-CNY), which aims to modernize its payment systems and enhance government oversight of the financial environment.
