Latest news with #BRI
Hindustan Times
a day ago
- Business
- Hindustan Times
Emerging opportunity for India in Sri Lanka
The IMF's decision to crack the whip on tax breaks granted by the Sri Lankan government to the Port City Colombo project is a welcome move because such non-transparent measures have largely benefited Chinese State-run firms implementing such ventures. It is also significant that IMF has nudged Sri Lanka to amend certain investment-related laws to make them more rules-based and aligned with international best practices. It should be noted that the China Harbour Engineering Company (CHEC), which is building the $1.4-billion Port City Colombo, was involved in the unsustainable development of the strategic Hambantota port, which Sri Lanka was forced to hand over to China on a 99-year lease after struggling to repay its debts to Chinese firms. Most of the projects under China's Belt and Road Initiative (BRI) in India's neighbourhood have come with crippling debt traps. India-Sri Lanka relations underwent a dramatic transformation during PM Narendra Modi's visit in April, when the two sides signed a defence cooperation agreement and roped in the UAE to develop the Trincomalee oil tank farm into an energy hub. These developments were aimed at countering what India perceived as growing Chinese security and economic presence in its backyard. India should now be prepared to expand its economic presence in Sri Lanka, where an Indian firm is engaged in developing a container terminal at Colombo port. New Delhi may not be able to match Beijing's unfettered largesse, but it has repeatedly shown that its assistance for neighbours comes without any unnecessary conditions and is largely driven by local needs. Stronger economic and energy integration between India and Sri Lanka will be a potent counter to China's efforts to encircle India by increasing its influence across the neighbourhood.
Forbes
3 days ago
- Business
- Forbes
U.S. vs Hong Kong Stablecoin Regulation: A Battle For Global Dominance
TOPSHOT - US President Donald Trump displays the GENIUS Act (Guiding and Establishing National ... More Innovation for US Stablecoins Act), which codifies the use of stablecoins — cryptocurrencies pegged to stable assets like the US dollar or US bonds — after signing it in the East Room of the White House in Washington, DC, on July 18, 2025. (Photo by Brendan SMIALOWSKI / AFP) (Photo by BRENDAN SMIALOWSKI/AFP via Getty Images) The global stablecoin market, surpassing $250 billion, is being reshaped by regulatory frameworks that will define competition and innovation. The U.S.'s Guiding and Establishing National Innovation for U.S. Stablecoins Act (GENIUS Act), passed by the House and signed into law by President Trump on July 18, 2025, and Hong Kong's Stablecoins Ordinance, enacted on May 21, 2025, and effective August 1, 2025, present contrasting approaches to governing fiat-referenced stablecoins. As an industry practitioner immersed in global policy and market dynamics, I am closely observing how these regulations will influence issuers, investors, and geopolitical strategies. Let's take an analytic look at their competitive impact, spotlighting Hong Kong's role in advancing China's Belt and Road Initiative (BRI) through stablecoin adoption in Global South economies. Regulatory Frameworks: Contrasting Visions The U.S. GENIUS Act establishes a tiered regulatory structure. Issuers with over $10 billion in circulation face federal oversight by the Office of the Comptroller of the Currency (OCC) or banking regulators, while smaller issuers can opt for state-level regulation, subject to Treasury approval. Reserves must be 1:1 backed by high-quality liquid assets (e.g., U.S. Treasuries ≤ 93 days, cash), with bans on yield-bearing stablecoins and lending activities. AML/KYC compliance under the Bank Secrecy Act is stringent, with penalties up to $100,000 per day for violations. Hong Kong's Stablecoins Ordinance, part of the LEAP framework (Licensing, Education, Application, Protection), requires issuers to be locally incorporated with a minimum capital of HKD 25 million (USD 3.2 million), though banks are exempt. Reserves must be 1:1 backed by liquid assets, with the flexibility to issue stablecoins pegged to any official currency, such as HKD, USD, or offshore RMB, leveraging Hong Kong's currency peg. The Ordinance focuses on fiat-referenced stablecoins (FRS), excluding algorithmic stablecoins due to their lack of effective stabilization mechanisms, aligning with Financial Stability Board recommendations. AML/CFT requirements meet FATF standards, with penalties up to HKD 5 million (USD 640,000) and seven years' imprisonment. Competitive Impact: Consolidation vs. Selective Innovation U.S.: Consolidation and Dollar Dominance The GENIUS Act prioritizes financial stability and U.S. dollar dominance, creating a high-compliance environment that favours large issuers like Circle (USDC). Federal oversight for issuers exceeding $10 billion, coupled with costly AML/KYC and audit requirements (estimated at $5M–$10M annually), drives market consolidation. For a $100 million issuance, a 0.5% operational cost equals $500,000 in expenses, challenging smaller issuers' profitability without significant scale. Photo by Jakub Porzycki/NurPhoto via Getty Images The ban on algorithmic stablecoins and restrictions on high-risk activities, such as lending, limit DeFi innovation, pushing issuers toward a banking-like model. This constrains growth loops in retail adoption but attracts institutional players, leveraging the U.S.'s leading position in the stablecoin market, driven by USD-pegged tokens like USDC and USDT. Requiring U.S. Treasuries in reserves aligns with national interests, boosting government borrowing power. However, high costs and lack of international coordination risk regulatory arbitrage, with issuers eyeing more flexible jurisdictions like Hong Kong and the UAE. Hong Kong: Selective Innovation and Regional Hub Hong Kong's Stablecoins Ordinance balances compliance with innovation but favours larger issuers. The HKMA's plan to issue a 'single-digit' number of licenses in 2025, as stated by Secretary Christopher Hui, signals a selective process prioritizing well-capitalized firms with robust compliance frameworks. While the HKD 25 million capital threshold is accessible, compliance costs (0.3%–0.5% of issuance, e.g., HKD 3M–5M for a $100M stablecoin) and stringent licensing criteria (e.g., monthly audits, AML/CFT) challenge smaller issuers, limiting their competitiveness. The exclusion of algorithmic stablecoins and lack of support for DeFi applications focus innovation on fiat-backed models, such as tokenized bonds and real-world asset (RWA) tokenization under LEAP's application pillar. Photo by Chen Yongnuo/China News Service/VCG via Getty Images The Ordinance's flexibility to issue stablecoins pegged to any official currency, including HKD, USD, or offshore RMB, enhances Hong Kong's competitiveness, attracting issuers targeting Asia-Pacific and global markets. This aligns with China's BRI by facilitating cross-border transactions in multiple currencies. The Bill's clarity and FATF-aligned standards position Hong Kong as a compliant hub, competing with Singapore and the UAE. However, the local incorporation requirement and selective licensing may deter smaller foreign firms, favouring established players with regional presence. Geopolitical Implications U.S. Dollar Dominance through Stablecoins The GENIUS Act is a strategic tool to extend U.S. dollar dominance into the digital realm, reinforcing the dollar's role as the world's reserve currency. By mandating that stablecoin reserves be backed 1:1 by high-quality liquid assets, primarily U.S. Treasury bills and cash, the Act ensures that USD-pegged stablecoins, which dominate over 90% of the $250 billion market, directly bolster U.S. government debt. For example, a $100 billion stablecoin issuance backed by Treasuries increases demand for U.S. debt, effectively funding government borrowing. This creates a powerful feedback loop: as stablecoin adoption grows for cross-border payments and digital transactions, so does the global demand for USD and Treasuries, cementing U.S. financial hegemony. This strategy, however, has triggered global pushback. The requirement for USD stablecoin holders - whether individuals, businesses, or institutions - to indirectly finance U.S. debt via Treasury-backed reserves is viewed unfavourably in jurisdictions seeking monetary sovereignty. Countries are countering with their own stablecoin regimes to promote local currency-pegged tokens: These regimes aim to protect sovereign currencies and assert financial autonomy in a digital transaction world increasingly powered by US dollar backed stablecoins. Hong Kong and the Belt and Road Hong Kong's stablecoin framework can be seen as an extension for China's Belt and Road Initiative (BRI), a $1 trillion infrastructure and trade network spanning 150+ countries, particularly in the Global South. Stablecoins offer a transformative solution for cross-border payments, which often incur 5%–7% fees in BRI corridors. A $10 million trade settlement via HKD-, USD-, or RMB-pegged stablecoins could save $500,000, enhancing efficiency for projects like ports in Pakistan, railways in Kenya, or energy hubs in Indonesia. By enabling stablecoin issuance in multiple currencies, including the offshore RMB, Hong Kong strengthens China's financial influence in regions with volatile local currencies, supporting BRI's goal of fostering trade and investment. Stablecoins also advance BRI's digital transformation objectives. In Global South economies, where trust in local banking systems is low, regulated stablecoins provide a stable medium for trade, remittances, and project financing. For instance, African exporters or Southeast Asian SMEs could use RMB- or USD-pegged stablecoins for instant, low-cost transactions, reducing reliance on Western financial networks. The LEAP framework's education pillar promotes blockchain literacy, while its application pillar encourages tokenized asset adoption, positioning Hong Kong as a financial bridge between China and BRI partners. Potential integration with China's digital yuan could create hybrid payment systems, amplifying China's role in global digital finance and challenging U.S. dominance. Conclusion: Navigating a Fractured Digital Financial Future The U.S. GENIUS Act, signed into law on July 18, 2025, and Hong Kong's Stablecoins Ordinance, effective August 1, 2025, represent divergent paths in the global stablecoin race. The U.S. drives market consolidation and dollar dominance through leveraging USD-pegged stablecoins' market leadership and tying stablecoin reserves to U.S. Treasuries strengthens its financial hegemony, though global pushback from different jurisdictions may signal a general shift toward sovereign stablecoin regimes. Hong Kong's selective licensing favours established issuers, with its flexibility to peg stablecoins to any currency, including the offshore RMB, enhancing its role as a BRI-driven hub. This multi-currency approach positions Hong Kong to capture Asia-Pacific markets and support China's global financial ambitions. Issuers face a stark choice: navigate the U.S.'s rigid but dominant market or Hong Kong's selective yet innovative ecosystem. As stablecoins reshape global finance, this regulatory rivalry underscores a broader battle for digital currency supremacy, with profound implications for economic sovereignty and cross-border trade.
Express Tribune
4 days ago
- Business
- Express Tribune
'BRI states must adopt diversified supply chain'
Listen to article In the current environment, the global supply chain has been continuously upgrading digitally, ie, achieving innovative and sustainable development, which is also a major responsibility that Pakistan and China should shoulder together, remarked National Bank of Pakistan (NBP) Beijing Office Chief Representative Shaikh Muhammad Shariq. Speaking at a panel discussion on supply chain services held during the 3rd China International Supply Chain Expo, the chief representative pointed out that the key link is to provide complete localised financial services and reduce conflicts between traders, which is crucial for both large leading enterprises and small startups. "The global supply chain must take a diversified path, not only for industrial powers like China, but also for all countries participating in the Belt and Road Initiative (BRI), and of course Pakistan, which is jointly developing CPEC (China-Pakistan Economic Corridor)." Shariq emphasised, "The optimised financing mechanism will allow us to have smoother capital flow and reduce our reliance on a single path, helping us to seek better financing strategies." Talking specifically about financial links between China and Pakistan, Shariq elaborated on NBP's efforts. "In 1981, we entered the Chinese market and opened a representative office in Beijing. Since then, we have been helping Chinese companies in different fields that are interested in doing business in Pakistan." "From a deeper perspective, policymakers in China and Pakistan have established very deep connections to simplify all financial-related processes, assisting us to confidently provide comprehensive services in the current complex and changing international environment, solving financial problems and of course the most important liquidity problem for enterprises. In a nutshell, a very stable supply chain ecosystem allows better cross-border cooperation between our two countries."
Bangkok Post
7 days ago
- Business
- Bangkok Post
Risks and rewards of Beijing's BRI
Thailand may play a pivotal role in advancing China's vision of regional connectivity through the Belt and Road Initiative (BRI), but scholars caution that while the initiative presents substantial opportunities, it also brings significant challenges. They urge the government to adopt strategic policies that safeguard national interests and promote constructive global engagement. Launched in 2013, the BRI, also known as the New Silk Road or One Belt One Road, is a global infrastructure and investment strategy that now involves more than 150 countries. The initiative comprises overland economic corridors across Central Asia and maritime routes through Southeast Asia, South Asia, the Middle East, and Africa. In an interview with the Bangkok Post, Asst Prof Sineenat Sermcheep, director of the Asean Studies Center at Chulalongkorn University's Faculty of Economics, underscored Thailand's strategic importance due to its geographical position and economic compatibility with the BRI. "Thailand is a vital link within the China-Indochina Peninsula Economic Corridor [CICPEC], connecting China with Asean nations," she said, adding the country has also engaged in BRI's regional trade and logistic projects such as the China-Laos-Thailand railway. These efforts align with key national strategies, including Thailand 4.0 and the Eastern Economic Corridor (EEC), which focus on innovation and high-tech industries -- areas that also attract Chinese investment under the BRI. "Thailand's targeted industries under the Thailand 4.0 scheme closely match those outlined in China's 'Made in China 2025' plan," Ms Sineenat said, adding this synergy has drawn Chinese investment, particularly in advanced technology and infrastructure within the EEC. She also highlighted several key agreements under the BRI framework between Thailand and China, including the Strategic Cooperation Agreement and the China-Laos-Thailand Economic Corridor, which are designed to improve transport connectivity, increase trade, and deepen economic cooperation. Political science lecturer, Anekchai Rueangrattanakorn, from Silpakorn University, said the BRI is not just an economic initiative, but a means of contributing to regional stability. He pointed to China's mediating role in conflict-prone regions along BRI routes as evidence of the country's interest in maintaining peace to safeguard its investments. "The BRI reflects not only China's economic ambition but also its aspiration to be seen as a responsible global power," he said. "Thailand could leverage this position to work more actively with China in resolving regional crises, particularly the ongoing conflict in Myanmar, a country central to the BRI's regional goals." Ms Sineenat said the BRI has strengthened Thailand–China ties through increased trade, infrastructure projects, and cultural exchanges. The China-Laos-Thailand railway, she said, supports both tourism and trade, while the development of Laem Chabang Sea Port as a maritime node under the BRI aims to connect with major Chinese ports like those in Ningbo and Guangzhou. "This maritime link will further boost trade between southeastern China and Thailand," she said. The BRI also supports Thailand's digital transformation, smart city initiatives, and the growth of e-commerce and digital payment systems. Thai businesses, especially in sectors like AI, green energy, and fintech, have benefited from access to Chinese markets and technologies. If fully realised, Ms Sineenat said, the BRI could accelerate Thailand's industrial modernisation and open up new markets in Central Asia, Eastern Europe, and Africa. Mr Anekchai agreed, noting BRI projects such as the Laos-Thailand railway have already strengthened economic ties while boosting intra-regional trade, tourism, and people-to-people exchanges. "The multilateral collaboration doesn't just foster long-term political trust between Thailand and China, but also signals Thailand's commitment to a win-win approach, which could enhance broader regional partnerships." He said the BRI could elevate Thailand's status as Asean's key connectivity hub and a more prominent diplomatic actor. However, he warned that such engagement requires careful diplomacy. "Thailand must strike a balanced foreign policy, working with China without alienating Western partners. A constructive and balanced approach is essential," he said. Ms Sineenat also warned about economic risks, including trade imbalances and fierce competition from Chinese firms, particularly affecting local small and medium-sized enterprises (SMEs). She also pointed to digital vulnerabilities. "Thailand must avoid over-reliance on Chinese imports and ensure fair trade," she said.
Arab News
16-07-2025
- Business
- Arab News
Senior Pakistan general pledges deeper strategic ties with China at PLA anniversary
KARACHI: Chairman Joint Chiefs of Staff Committee (CJCSC) General Sahir Shamshad Mirza on Tuesday reaffirmed Pakistan's commitment to further strengthening ties with China, while addressing a ceremony marking the 98th founding day of the People's Liberation Army (PLA), according to an official statement. Islamabad and Beijing are long-time allies and have jointly pursued multibillion-dollar infrastructure, energy and regional connectivity projects under the China-Pakistan Economic Corridor (CPEC), a flagship initiative of China's Belt and Road Initiative (BRI). The corridor provides Beijing with direct access to the Arabian Sea through Pakistan's Gwadar port, while enabling Islamabad to modernize infrastructure and boost regional trade. The two countries also maintain close cooperation in defense and security. Earlier this month, India's Deputy Army Chief, Lt. Gen. Rahul Singh, claimed China had provided Pakistan with 'live inputs' during a four-day military conflict with India in May. Pakistan's Defense Minister Khawaja Asif, in an exclusive interview with Arab News last month, described the outcome as a 'victory' that was entirely 'Made in Pakistan.' 'In his address, the CJCSC highlighted the enduring and time-tested 'Iron-clad brotherhood' between Pakistan and China, with shared resolve to broaden and deepen this unique relationship across all domains,' the military's media wing, Inter-Services Public Relations (ISPR), said in a statement. 'He commended PLA's pivotal role under the visionary leadership of His Excellency President Xi Jinping for China's remarkable development and rapid modernization, which has transformed People's Republic of China into a key pillar of peace, stability and prosperity,' the statement added. 'CJCSC highlighted China as a stabilizing factor in the regional security dynamics.' The event, held in Rawalpindi, was attended by a wide cross-section of civilian and military officials, diplomats, media representatives and business leaders. General Mirza also reiterated Pakistan's 'unwavering commitment' to ensuring the security of Chinese nationals working in the country. Thousands of Chinese citizens are employed across dozens of CPEC-linked projects, many of which are located in volatile regions such as Balochistan and Khyber Pakhtunkhwa, where separatist and militant groups have repeatedly targeted foreign workers. Chinese nationals have also come under attack in Karachi, Pakistan's largest city and commercial capital, prompting authorities to implement tighter security protocols.
