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- JD.com and Ant Group urge China to authorize yuan-based stablecoins to support trade.
- Offshore yuan stablecoins in Hong Kong could boost global use of the Chinese currency.
- The dominance of U.S. dollar stablecoins is pushing Chinese firms to act fast.
JD.com and Ant Group are making a fresh appeal to China’s central bank. They want approval to launch stablecoins pegged to the offshore yuan. These coins would operate first in Hong Kong. The companies believe it could help promote wider use of the Chinese currency in global trade.
Both companies already plan to issue Hong Kong dollar-denominated stablecoins when new rules take effect in August. But the Hong Kong dollar is still pegged to the U.S. dollar. By issuing coins pegged to the yuan, that dependency could be abolished.
JD.com has been at the forefront of negotiations with the central bank. The company finds offshore yuan coins an indispensable tool. The aim is to promote yuan internationalization and compete with the growing supremacy of the U.S. dollar in digital finance.
Most of the world pegs its stablecoins to the U.S. dollar. U.S. dollar-pegged coins like Tether (USDT) now lead crypto cross-border payments. Exporters from China use them to accept foreign payments. This bypasses the yuan and injects new risk into China’s monetary ambitions.
Yuan Trails Dollar in Global Payments
Even the global payments share of the yuan has fallen below 3%, behind the dollar’s close to 50% share. Capital controls are tight in China. That hurts the usability of the yuan in foreign markets. In the case of stablecoins, you can circumvent this. Fast and cheap settlements are possible with them. Dollar coins are now preferable to banks for most of the exporters.
The more Chinese companies seek out such coins, the more the regulatory body is compelled into action. In turn, Chinese policymakers become increasingly at ease with stablecoins. Hong Kong offshore yuan coins are now called by certain advisors a viable reality. JD.com even proposed Hong Kong as its base of launch and then expanding into the free trade zones of China.
If the authorities give their stamp of approval, it would be a shift of approach in China’s crypto policy. Others are also moving fast as well. The U.S. is building more specific rules for stablecoins. Some American leaders now openly support them themselves. Hong Kong also aspires to be an influential hub of digital assets. These measures challenge China’s reluctance in unveiling digital currency products aimed at international markets.
Stablecoins Power Digital Asset Growth
In an effort to match up, Ant Group is targeting Hong Kong and Singapore stablecoin licenses. JD.com is also targeting the same in other large economies. The two companies consider the yuan stablecoin as the foundation of China’s digital trade future.
In the last months, the stablecoins have been the cornerstone of the crypto universe. One of the analysts described the process of the coins becoming the foundation of crypto. The stablecoin market has now surpassed the $160 billion milestone.
Usage is expanding into sectors like DeFi, cross-border payments, and payroll processing. Yet, the majority of the holders just leave them dormant and don’t earn anything from them. The analyst described the process of discovering the “Stablecoin Earn” facility in Trust Wallet. He attempted it despite early doubts and was able to find it easy enough to operate.
The site racked up $20 million in total value locked in less than one week. It has up to 7% APY returns. You can deposit the stablecoins USDT, USDC, DAI, and USDA. China must act fast in the future. As the world embraces the utilization of stablecoins, the yuan will be left behind in the digital world of finance if it acts any slower. Months ahead of us are decisive.
Related Reading: Bitcoin Poised for Big Moves: 79.8% Likelihood of Continued Bullish Trend
