Latest news with #eCNY
Yahoo
a day ago
- Business
- Yahoo
JD.com, Ant Group Push for Yuan-Based Stablecoins to Counter Dollar Rule: Reuters
China's and Ant Group are pressing the central bank to permit yuan-based stablecoins to counter the rise of U.S. dollar-linked digital currencies, Reuters reported on Friday. They propose launching stablecoins in Hong Kong backed by the offshore yuan, aiming to boost the Chinese currency's global role. Both firms already plan to issue Hong Kong dollar-backed stablecoins once local legislation begins August 1. However, is advocating for offshore yuan stablecoins as a strategic move to support yuan internationalization. The push reflects China's broader ambitions to challenge U.S. dominance in digital finance and expand the reach of its currency globally. China has a long-standing ban on cryptocurrency transactions, which extends to most private stablecoins. This ban, particularly intensified in 2021, was motivated by concerns over financial crime, capital flight, and potential threats to financial stability. As a counter, China poured resources into developing and piloting its own digital yuan (e-CNY). This central bank digital currency (CBDC) is seen as a way to modernize its payment system and exert greater control over its financial landscape.
South China Morning Post
4 days ago
- Business
- South China Morning Post
The world is going all-in on stablecoins. Is China's digital yuan any different?
When South Korea reportedly halted its digital currency pilot programme this week in favour of stablecoins – cryptocurrencies pegged to a reference asset, typically a fiat currency – it sent shock waves through central banks across the world. Advertisement It also left China – a pioneer in central bank-backed digital currencies with its digital yuan, or e-CNY – with an important question to answer, namely whether it should continue to explore such digital assets or revisit the possibility of adopting the popular stablecoin format for its own purposes. At first glance, stablecoins appear to have similar qualities to the digital yuan or other digital currencies, but there are significant differences in their design, purpose and management. What distinguishes stablecoins from the digital yuan? Issued by China's central bank, the e-CNY is the digital form of China's sovereign currency. It can be used for everyday transactions such as retail payments, government disbursements, salaries and public transport fares, and does not require a bank account. First piloted in 2020, it had been used in 26 cities for transactions worth a total of 7 trillion yuan (US$977 billion) by June last year. The digital yuan is largely intended for small domestic retail payments, and it cannot be exchanged for foreign currencies. Its cross-border use is being developed through the mBridge project, coordinated by the multinational Bank for International Settlements. Advertisement Unlike the digital yuan, which is entirely under the umbrella of a central bank, stablecoins are blockchain-based and privately issued cryptocurrency tokens pegged to fiat currencies like the United States or Hong Kong dollars. Issuers hold reserve assets, such as US Treasury bills, to back the total value of the tokens at a ratio of one to one.
