China to Launch First Stablecoin Amid Internationalization Efforts
China is preparing to launch its first stablecoin to promote the internationalization of the renminbi and strengthen its position against the US dollar. However, concerns about capital flight are slowing stablecoin technology development in the country.
China Explores Stablecoin Initiatives
- Hong Kong is a testing ground for cryptocurrency due to strict regulations on the mainland.
- The territory has passed legislation allowing licensed businesses to issue fiat-backed tokens.
- The Hong Kong Monetary Authority (HKMA) will issue a limited number of licenses starting next year.
- Chinese policymakers acknowledge the impact of dollar-backed stablecoins on the global economy.
- Central bank governor Pan Gongsheng highlighted that stablecoins have reshaped traditional payment systems.
- Discussions among regulators focus on stablecoin projects aligned with China's national conditions.
- Experts warn that risks from capital outflows could hinder progress.
Interest Grows In Hong Kong
- Rebecca Liao, CEO of Saga, noted difficulties in fully controlling stablecoin technology.
- Hong Kong's stablecoin market is developing slowly compared to the US.
- HKMA expresses concerns regarding potential money laundering linked to stablecoins.
- Initial stablecoin programs will likely target business-to-business applications.
- Interest among Chinese state-owned enterprises in stablecoin licenses is increasing.
- Only one major state-owned bank is expected to receive a license in the initial phase.
- HKMA may approve licenses for offshore renminbi-backed stablecoins to enhance cross-border payments.
