The stablecoin fever is spreading to China, and while the mainland’s stance on digital currencies has yet to change, more companies are exploring stablecoins backed by offshore yuan. The latest is China-based blockchain project Conflux, which announced over the weekend that it’s launching a new stablecoin.
According to local state media reports, Conflux has partnered with Chinese digital security firm Eastcompeace Technology and AnchorX, a Hong Kong-based fintech startup. It has also teamed up with TokenPocket, a digital asset wallet, to promote the new token to its users.
The report by the Shanghai Municipal People’s Government revealed that the new stablecoin will target offshore clients in countries under China’s Belt and Road Initiative (BRI). The latest data shows that the initiative launched in 2013 includes over 150 countries across Asia, Africa, the Middle East, Latin America, and Eastern Europe. This includes some of the world’s largest economies such as India, Saudi Arabia, Indonesia, Russia, the United Arab Emirates, and Kazakhstan.
Conflux’s partners in the new initiative have made significant strides in the stablecoin world in the past year. In February, AnchorX received in-principle approval by authorities in Astana, Kazakhstan, to issue AxCNH, a stablecoin pegged to offshore yuan. The new stablecoin would be issued on the Conflux network.
Conflux becomes the latest to enter the heating race to develop China’s first stablecoin. It joins tech giants like Ant International and JD.com (NASDAQ: JD), which are pursuing licenses in Hong Kong to launch stablecoins pegged to the offshore yuan.
Experts believe that yuan-pegged stablecoins could be China’s best bet at improving the use of its currency in global trade, where it currently commands a paltry 3%, ranking below smaller economies like Britain’s pound and Japan’s yen. The Chinese central bank has been pushing the digital yuan, but as global interest in central bank digital currencies (CBDCs) wanes, it’s reportedly warming up to stablecoins.
According to one expert, the signing of the GENIUS Act into law will only accelerate China’s stablecoin momentum. Yifan He, whose Hong Kong-based Red Date Technology developed China’s national blockchain service, says the Act has forced the People’s Bank of China to start paying attention to stablecoins.
Thailand loosens ICO rules
Elsewhere, the Thai government is seeking public feedback on proposed rules that would relax the strict policies governing initial coin offerings (ICOs), easing investors’ access.
The Securities and Exchange Commission (SEC) recently announced that it would conduct public hearings on the proposals, which would reduce the burden of repeated tests for investors. Under the current laws, they must undertake and pass these knowledge tests every three months to invest in ICOs. The watchdog proposes that they only undertake the tests once every two years.
“This proposal aims to reduce the burden on both ICO portals and investors by canceling the requirement for such assessment every three months,” the SEC said.
Additionally, the new law shifts some of the responsibility to the ICO portals, which must “ensure that investors in digital tokens understand the investment risks and have a risk tolerance level appropriate and in alignment with the product risk.”
The public hearing ends on August 1.
While ICOs have cooled down globally, Thailand views them as vital fundraising avenues and has been implementing new laws for the sector over the past three years.
In April 2024, the SEC introduced new laws requiring ICO issuers to include all the necessary information that could impact investors’ decisions on their advertising materials. They must also implement checks and balances to prevent and manage conflicts of interest.
It followed this up in March by adding USDT and USDC stablecoins to the list of tokens acceptable in ICO fundraising.
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