JD.com and Alibaba have been trying to get the People’s Bank of China to approve a stablecoin based on the offshore yuan to challenge USD-backed stablecoins.
China Rare Earth Group, Ant Group, and the People’s Bank of China (PBoC) have come forward to deny rumors that claim they plan to launch a joint effort to deploy a rare earth-backed RMB stablecoin.
China Rare Earth Group and Ant Group issued statements refuting the claims that have been making the rounds on the Internet about such a project, tagging the information as fabricated and misleading.
Over the weekend, the company revealed that several articles had painted a story that suggested the project was in development, which is, in fact, misleading.
“Ant Group has never had such plans with relevant institutions. The public is advised to pay attention and beware of being deceived,” it shared on Weibo on Sunday.
The denial has come amid a heightened interest from Chinese companies in stablecoin technology as other countries work on regulation that encourages innovation in that area.
There is heightened interest from Chinese companies in stablecoin technology
According to reports, this is still the early days for stablecoins in Chinese jurisdictions. For now, the scope is strictly restricted to international audiences rather than domestic ones.
Last month, Chinese regulators urged brokerages to reduce publishing research and making public comments linked to stablecoins, citing concerns about how it was renewing domestic interest in cryptocurrencies.
With crypto trading officially banned in China due to fears of financial regulation and economic stability, Chinese companies interested in crypto are now looking towards Hong Kong, where a stablecoin regime is forming.
According to Edwin Cheung, CEO of Gate Dubai and a former executive at Gate HK, said: “A lot of e-commerce firms, they’re super energetic about the Hong Kong regime, adding that “they want to leverage on this regime, either to do their own stablecoin or use stablecoin technology or blockchain technology in their own payment network within their business.”
China and Russia see stablecoins as a path to challenge dollar dominance
America opened its eyes to the merits of the stablecoin earlier than most and has set the stage for dollar-backed stablecoins to become the world standard, just as the fiat dollar is. However, China and Russia are not about to sit back and let that happen without a fight.
For several months now, JD.com and Alibaba have been pleading with the People’s Bank of China (PBOC) to approve a stablecoin based on the offshore yuan.
The initiative is being floated just as Russia’s digital ruble is about to become mandatory for banks and large retail chains. Richard Liu, founder of JD.com, has said the yuan backed by a stablecoin is crucial to support the internationalization of the Chinese currency.
While crypto is still banned in mainland China, the Chinese government is keeping an eye on Hong Kong, which it sees as a legal and technological mirror.
This month has seen Hong Kong officially become a regulated ground for stablecoins, and JD and Ant have sighted a geopolitical opportunity.
In May, the city adopted the Stablecoins Ordinance, a legislation regulating stablecoin issuers, and it is being treated as a test. If all goes well, it may change the stance of the government on crypto in China and ultimately set the stage for the rise of a yuan-backed stablecoin that could threaten dollar dominance.
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