SEC Commissioner Hester Peirce: Stablecoins May Be USA’s Answer to China’s Digital Yuan

SEC Commissioner Hester Peirce: Stablecoins May Be USA’s Answer to China’s Digital Yuan

Meanwhile, the Fed Chair is in no rush to issue a digital dollar either as the focus is on doing it right than doing it fast.

China’s digital yuan will not overthrow the dollar’s reign, said a top US Securities and Exchange Commission official (SEC). And this is because of the growth of dollar-backed stablecoins.

Central banks around the world are working on the digitized version of their fiat currency with an aim to improve the payments system.

The People’s Bank of China (PBOC) is leading this race of a central bank digital currency (CBDC) as it extends the trials of digital yuan to more cities and even across borders in Hong Kong.

This fast pace of China has some worried that the yuan could gain dominance over the dollar, the world’s leading reserve currency. But according to Hester Peirce, aka “Crypto Mom,” the rise of stablecoins wouldn’t let that happen. she said,

“Even in 2021, there’s been a tremendous growth in stablecoins – these are essentially private digital dollars.”

“That, effectively, may be our answer to the Chinese CBDC (central bank digital currency). It may be just private stablecoins.”

“If they’re dollar-backed, then I think that the dollar will still be quite relevant,” said Peirce during a digital currency event.

According to the International Monetary Fund, the dollar accounted for almost 60% of the world’s official foreign exchange reserves at the end of 2020, while China’s share is just 2.25%.

Stablecoins, meanwhile, are on their way to surpass $100 million in market cap, with Tether the dominant stablecoin has a market cap of $51 billion alone, which is managing over $20 billion in trading volume every day. Tether’s on-chain volume has reached $754 billion YTD, already 2% higher than the total volume transacted in 2020, per IntoTheBlock.

On the topic of a digital dollar, Federal Reserve Chairman Jerome Powell said this week that China’s digital yuan plans wouldn’t push them to rush its own CBDC plans, adding that China’s approach won’t work in the US.

“It is far more important to get it right than it is to do it fast,” Powell said.

“The currency that is being used in China is not one that would work here. It’s one that really allows the government to see every payment for which it is used in real time.”

The US central bank is taking its time to understand digital currencies, he said. “Central bank digital currencies are now possible,” Powell said.

“We need to understand whether that is something that would be a good thing for the people that we serve.”

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Author: AnTy

Filecoin (FIL) Recording More Volume than BTC and ETH Combined on China’s Largest Exchange

Filecoin (FIL) Recording More Volume than Bitcoin and Ether Combined on China’s Largest Exchange

While Huobi is seeing immense demand from users for FIL, Grayscale also added 29.55k FIL today. Unlike Grayscale’s four other new investment products, FIL is the only one with explosive returns.

In terms of price performance, the star of this week is Filecoin which rallied more than 90% during this time to hit an all-time high of nearly $237 today.

From its all-time low of $20 just three months back on Dec. 29, this coin has pumped 1,057%. FIL also soared 415% against BTC during this time, despite the largest crypto pumping to $62k and became a trillion-dollar asset.

With these gains, Filecoin jumped past Litecoin LTC 3.72% Litecoin / USD LTCUSD $ 203.96
Volume 3.82 b Change $7.59 Open $203.96 Circulating 66.75 m Market Cap 13.61 b
5 h Filecoin (FIL) Recording More Volume than Bitcoin and Ether Combined on China’s Largest Exchange 2 d PayPal Now Allows US Customers to Pay with Crypto at its 29 Million Merchants 1 w Free Crypto Trading App Robinhood Files S-1 Paperwork With SEC to Go Public
and Chainlink LINK 5.26% Chainlink / USD LINKUSD $ 30.22
Volume 1.75 b Change $1.59 Open $30.22 Circulating 416.01 m Market Cap 12.57 b
5 h Filecoin (FIL) Recording More Volume than Bitcoin and Ether Combined on China’s Largest Exchange 1 d Teeka Tiwari Presents Crypto’s Next Trillion Dollar Coin Event Today 6 d SushiSwap Launches A ‘Game-Changer;’ BentoBox’s 1st DApp Is Kashi Lending & Margin Trading
to capture the 9th spot with a market cap of $8.67 billion.

“China is crazy for Filecoin,” noted Wu Blockchain as FIL records more volume in the country than the combined volume of the top cryptocurrencies BTC and Ether.

The project, which raised more than $200 million in just thirty minutes in 2017, also received investment from the Shenzhen-based computer hardware giant Xinyuan Technology Co.

Xinyuan invested 580 million yuan (just under $90 million) in Filecoin miners, which could have stemmed from its partnership with a Jiangxi-based electronic company called Sesumg which will “ship 500 units of computing and 100 units of storage equipment to the company.”

This week, The9 Limited (Nasdaq: NCTY) signed a Filecoin mining machine purchase and hosting agreement of $2 million following the $10 million agreement in Feb.

Currently, The9 owns an independent node on its blockchain. It has 8 Pebibytes of effective storage mining power in the Filecoin network, which will be increased to over 80 Pebibytes once the two agreements are fully implemented.

Filecoin is an open-source, distributed storage, and digital payment system.

Though Filecoin acquiring Amazon Web Services is nothing but an April Fool’s joke, another reason for the jump in its prices is Grayscale. The world’s largest digital asset manager bought a bunch of coins.

It started on March 19 with just 700 FIL which increased by 14.8k FIL the next day only to add a whopping 29.55k FIL today. Grayscale’s institutional and accredited investors have bought a total of 45.55k FIL.

It was just last month that Grayscale announced the addition of Basic Attention Token (BAT), Chainlink (LINK), Decentraland (MANA), Filecoin (FIL), and Livepeer (LPT) to its investment products.

Much like FIL, Grayscale also bought a ton of the other altcoins today and now holds 115.57k LINK, 3.2 million BAT, 414.4k LPT, and 17.16 million MANA.

However, unlike Filecoin’s explosive returns, the same performance wasn’t recorded by other coins. In the past 7-days, LINK prices have increased by 24%, BAT 17.4%, LPT 50%, and MANA 20%.

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Author: AnTy

Ant Financial and Tencent- Backed Banks Joins China’s Digital Currency Trials

Ant Financial and Tencent- Backed Banks Joins China’s Digital Currency Trials

Alibaba and Tencent owned banks set to launch China’s digital yuan trials. The private banks will simulate trials set across state-owned banks.

  • MYBank, an Ant-Financial-owned bank, plans to launch digital yuan trials across China as the state’s digital currency/ electronic payment (DC/EP) project edges closer to full launch.
  • Tencent-backed WeBank also announced similar plans to launch digital currency wallets.

According to a Bloomberg report, the two projects will have the same functionalities as the digital wallets already in trial across six government-owned banks. The six banks, including Industrial and Commercial Bank of China, China Construction Bank, Agricultural Bank of China, and Bank of China, launched the trials across provinces in the country, allowing users to make digital payments and transfer money.

The addition of the two banks aims at increasing the adoption and utility of the digital yuan across China. MYBank, in particular, has been a key researcher in developing an electronic yuan in the past and looks forward to furthering its commitment to digital payments. The bank will partner with the People’s Bank of China (PBoC) to “steadily advance the trial” of the digital yuan in the future.

The central bank has already made massive steps in preparing for the launch of the digital yuan. Earlier in the month, BEG reported a partnership between the PBoC and SWIFT to launch a new digital payment service that could be tied to its CBDC. Additionally, the bank completed its largest yet rollout test for the CBDC, disbursing over $3 million worth of the digital currency to over 30,000 citizens.

The two firms become the first private firms to join the digital yuan trials with a potential battle with payment services such as WeChat Pay and Alipay in sight. Despite

Alibaba’s Ant Financial owns a 30% stake in MYBank, while Tencent is the largest shareholder of WeBank, holding 30% of its stake.

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Author: Lujan Odera

Cosmos (ATOM) Joins Forces with China’s Blockchain Service Network (BSN)

Cosmos (ATOM) Joins Forces with China’s Blockchain Service Network (BSN)

  • China-only Blockchain-based service network (BSN), China’s blockchain infrastructure project, announced the addition of Cosmos (ATOM) blockchain to its network.

In a tweet sent out this Monday, Chinese permissioned blockchains, BSN open permissioned blockchains (OPBs) announced they’ve adapted the first batch of networks, “Wechang chain” based on the Cosmos blockchain and Tai’an chain based on FISCO BCOS.

The Chinese only blockchain service network only permits permissioned enterprise blockchains, which differs from the global version which supports any blockchain.

China’s BSN is aiming to promote permissioned blockchains interoperability and improve the efficiency of transacting across them hence the move to add Cosmos. The integration might of Cosmos, a multi-chain system focused on completing cross-chain value transfer, could be a major step in transacting digital assets and data across permissioned enterprise blockchains.

Moreover, Cosmos is also well regulated under China’s laws and will help keep China’s BSN and the BSN international community in check.

The BSN international community has been growing in the past few years adding Ethereum, Tezos, Nervos, Neo, EOSIO, and IrisNet (developed by Chinese blockchain startup Bianjie, also the creator of Wenchang Chain) in September 2020. More blockchain was added later in the month including Solana, Algorand, and ShareRing with a plan to add over 40 blockchains by summer.

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Author: Lujan Odera

SWIFT and China’s Central Bank, PBoC, Partner To Launch A New Digital Payments Venture

SWIFT and China’s Central Bank, PBoC, Partner To Launch A New Digital Payments Venture

  • PBoC partners with the SWIFT payments system to form a new financial payment company.
  • The full details of the partnership are yet to be released.
  • China is hastening the release of its central bank digital currency (CBDC).

In a report first published by The Block, the clearing center and the digital currency research institute at the People’s Bank of China (PBoC) and SWIFT, the global interbank settlement firm, SWIFT, have formed a partnership to launch a new financial payment service, Finance Gateway Information Service Limited, public records show.

According to the reports, the firm was registered on January 16, starting with 10 million EUR (~412 million) as the incorporation capital. No further details on the functions or scope of the funding were offered on the registration document. The PBoC and SWIFT both declined to comment on the matter.

SWIFT’s Hong Kong subsidiary largely owns the firm with 55% of the incorporation contribution and PBoC’s fully-owned domestic subsidiary, China National Clearing Center (CNCC), which will own 34%of the new entity. Other investors in the initial funding include CNCC’s subsidiary Cross-border Interbank Payments and Settlement Limited (CPIS), PBoC’s Digital Currency Research Institute, and Clearing Association of China (PCAC).

According to a person familiar with the matter, there are five board members in the new entity, including SWIFT China’s CEO, Daphne Huang; Cheng Shigang, a vice general secretary of the PCAC; three members from the global settlement firm and Mu Changchun, the head of the PBoC’s digital currency research institute.

SWIFT announced a new platform to ease account payment services and compete with Ripple, VISA, and MasterCard in April last year. Moreover, SWIFT has been at the forefront in boosting the Chinese Yuan’s use through its platform.

China’s CBDC is Around the Corner

The increasing digital payment projects cropping up in China could signal that the digital yuan is closing in on its launch. Earlier this month, the PBoC completed its largest pilot program for the CBDC in Shenzhen province, with over $3 million worth of digital yuan distributed to over 100,000 citizens in the area.

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Author: Lujan Odera

Former PBoC Governor: China Doesn’t Have ‘An Ambition to Replace Existing Currencies’

China’s former head of the central bank said digital yuan could be useful for cross-border trade and support its efforts to promote yuan as an international currency.

Zhou Xiaochuan, who stepped down as governor of the PBOC in 2018, spoke at the Shanghai Financial Forum on Friday. According to him, digital currency allows payments and currency conversions in real-time and “brings new possibilities for interconnection.”

“If you are willing to use it, the yuan can be used for trade and investment,” said Zhou, who has been a leading advocate for China’s sovereign digital currency. He also noted that the digital yuan isn’t intended to replace globally accepted fiat currencies like the US dollar.

“We are not like Libra and we don’t have an ambition to replace existing currencies.”

China has learned a lesson from Diem and took a more cautious approach. The idea is to persuade consumers and merchants to accept digital yuan payments as it quickly resolves “the problem of cross-border remittances.” He said.

“Some countries are worried about the internationalisation of yuan.”

“We can’t push them on sensitive issues and we can’t impose our will. We must avoid the perception of great power chauvinism.”

China is preparing for cross-border testing of digital yuan in partnership with Hong Kong. Additionally, over $3 million in digital yuan was airdropped to 10k residents of Suzhou on Friday. Trials are being run in other cities, including Chengdu, the Xiong’an New Area, and Hong Kong, in collaboration with companies like Didi Chuxing, Meituan, and Bilibili.

Central Banks Divided on Private Sector’s Role

According to a survey by the Official Monetary and Financial Institutions Forum (OMFIF), more than half of the central banks surveyed expect countries to collaborate with the private sector to build and run payments systems.

The central banking and economic policy forum found that central banks are split over whether to work with private sectors in payments as three-quarters of the banks said it was the state’s job to govern such systems.

The survey by the think tank involved 20 central banks and regulators in advanced and developing economies. Bhavin Patel, OMFIF’s head of fintech, said,

“It’s up to the central banks to balance how they approach collaboration – whether it’s setting joint projects together … or if it’s more just making sure that what comes to the market is properly regulated.”

The report was produced with fintech firms that include PayPal, Citigroup, Mastercard, and Novi, the digital wallet division of Facebook. Patel said,

“Regulators need to keep pace with these innovations. New, non-traditional payment entities will emerge as systemically important components of the financial system. Proactive central banks and regulators, keen to harness the benefits of payments innovation without undue policy risks, engage more with industry.”

Demand for more efficient payments is growing, a trend that has accelerated during the coronavirus lockdowns but regulators fear that the wide use of private currencies could lower their control over monetary policy. Just last week, German Finance Minister Olaf Scholz said,

“We must do everything possible to make sure the currency monopoly remains in the hands of states.”

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Author: AnTy

Chinese Tech Firms Didi, Meituan, & Bilibili Launch Lottery-Based Trials for Digital Yuan

Tests for China’s digital yuan are still ongoing as companies continue to join the People’s Bank in its efforts to digitize the currency.

This week, local news source CLS confirmed that three large internet companies had joined the tests in what appears to be a lottery-style trial.

Everyone Welcome

As the news explained, Didi Chuxing, the largest ride-hailing service in the country, had joined commercial products and bike-sharing company Meituan and video-sharing site Bilibili on a lottery-based trial of the digital yuan. The test will focus on Suzhou, a region on the western side of Shanghai.

The report explained that the trial launched earlier today, and it will involve about 10,000 residents in the city. These residents will vie for about 200 digital yuan units each, which they can spend at merchant stores with point-of-sale technology.

In addition to retail spending, the winners can spend the tokens on the three companies’ services. They can order rides on Didi, pay for bike-sharing on Meituan, and spend on new features from Bilibili’s site. It is unclear how long the trial will last, but it continues what appears to be a series of rests and implementations for the digital yuan.

All Hands on Deck

The companies are just a shortlist in a line of corporations looking to test the digital yuan. The Peoples’ Bank has incorporated several other companies for the better part of the year, with names including Alipay and WeChat Pay, the country’s two largest payment processors.

In October, Huawei, the country’s largest smartphone manufacturer, announced on its Weibo channel that its next flagship device – the Mate40 series – will come with a hardware wallet for the digital yuan. Touting it as a channel to be a part of China’s digital revolution, Huawei explained that the wallet would provide optimal privacy and anonymity.

The wallets will also feature dual transactions, ensuring that users can complete transactions by touching two compatible phones, even without any internet connection.

The tests have also gone beyond just tech companies. Economic Information Daily reported in October that gas stations in Shenzhen had begun accepting the asset. As the news medium confirmed, 11 gas stations had been integrated into the program, and more would join.

The program was the brainchild of Guangdong Petroleum, a state-owned oil, and gas firm. Participating outlets come fitted with barcode readers to ensure easy and quick payments. Guangdong praised the asset’s speed and security, explaining that reviews of its use had been positive. It is expected that these trials have ended already.

A similar giveaway to what is happening in Suzhou also occurred in the Luohu District of Shenzhen. Per a Sina Finance report, the district’s government started a program to send ten million units of the asset (worth about $1.5 million) to 50,000 residents via a lottery.

Unlike this program, however, that one focused primarily on retailers and brick-and-mortar shops across the region.

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Author: Jimmy Aki

Huobi’s Dollar Pegged Stablecoin, HUSD, to Debut on Nervos Blockchain

Nervos, the public blockchain eyeing to rival Ethereum for China’s DeFi market, is integrating the HUSD stablecoin, according to an announcement on Dec 8. HUSD is a dollar-pegged stablecoin issued by Stable Universal Limited, an Huobi-backed venture. Notably, the HUSD stablecoin will debut as the first of its kind within the Nervos blockchain; before this milestone, HUSD was only supported by Ethereum.

The announcement highlights HUSD’s value proposition within the Nervos ecosystem; some of the featured use cases include trading, payments, commerce, and remittances. Stable Universal CEO Frank Zhang welcomed the support by Nervos, noting that the new expansion is in line with HUSD’s vision to scale DeFi access and the blockchain ecosystem in general. Zhang said,

“We are enthusiastic that this integration bids well for more future projects as we tackle more innovative ways to introduce users to the DeFi ecosystem.”

HUSD Support on Nervos

The HUSD stablecoin is pegged on a 1:1 ratio against the dollar; its debut on Nervos means that the same ratio will hold. As such, the stablecoin will be issued based on Nervos’ SUDT technical standard; this is the native ‘ERC-20’ of the Nervos blockchain network. With the integration set for completion early next year, Nervos users will be able to deposit USD and receive HUSD on a 1:1 basis.

This stablecoin will be functional on both the Nervos Common Knowledge Base (CKB) and its permissionless layer-1 blockchain. Other than the previously highlighted use cases, the HUSD stablecoin is expected to be a hedge against price volatility. Nervos co-founder, Kevin Wang, shared optimistic sentiments on the milestone to support HUSD,

“Stablecoins have been a priority for Nervos as we build out our ecosystem to support a wide variety of DeFi projects. HUSD has gained remarkable traction in establishing its place as one of the top stablecoins in the market in such a short time, so we’re excited to see what results from this continued collaboration.”

Despite being a recent innovation, the HUSD stablecoin has been making breakthroughs to feature among the top five stablecoins as of press date. The coin enjoys a market cap of over $230 million, while the total issued HUSD stablecoins is past the 2 billion mark since its launch back in July 2019.

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Author: Edwin Munyui

World’s 4th Largest Bank Drops the $3B Bond Tradeable Against USD & BTC Amid Fintech Backlash

China’s Construction Bank (CCB) has withdrawn the listing of its $3 billion bond on the Malaysian cryptocurrency exchange. The bonds were to be issued by Longbond Ltd, which was to be created specifically to issue digital bonds.

The bond, which was to be tradable on the FUSANG exchange, a crypto trading platform, had CCB Lauban as its listing sponsor.

The day the bond was to be traded, the Labuan-based exchange received a letter from CCB informing them that the world’s second-largest lender “decided not to proceed” with the issuance. The reason for the suspension wasn’t given, said Henry Chong, chief executive of FUSANG. Fusang said in the statement on Monday,

“The exchange has accepted this decision, and is announcing the suspension of the listing with immediate effect.”

This month, Ant Group met with troubles with its record-breaking IPO, just 48 hours before it was to be listed.

According to South China Morning Post, with China’s central bank rolling out its own digital yuan, “CCB’s digital bonds, which can be bought and traded using US dollars or bitcoin, appear to undermine efforts to safeguard its currency sovereignty.”

SCMP is owned by the Chinese Alibaba Group, founded by Jack Ma, who is also the controlling shareholder of Ant Group. Jacky Zuo, an analyst at Hong Kong-based China Renaissance, said,

“If a retail investor could use bitcoin or other cryptocurrencies to trade such digital bonds backed by a Chinese bank, there may not be a welcoming stance from the policymakers’ perspective.”

“This could be seen as challenging the digital yuan.”

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Author: AnTy

China Trials Its Central Bank Currency, The Digital Yuan, In Shenzhen’s Gas Stations

China’s Central Bank assists Shenzhen citizens in using its digital currency as payments to refuel their motor vehicles. The community in the tech hub of China (Shenzhen) received $1.5 million in digital Yuan, airdropped to gear up the project, 11 gas stations are now accepting digital currency as payments, reported Economic Information Daily.

A leading agency, Guangdong Petroleum conducting tests and unveiled its pilot this week on 13 October. To make a transaction, QR codes are available at stations to scan and work the same as commercial payment apps like Apple Pay.

The community experienced best practices and gave positive feedback yet, as it completes transactions in a few seconds. Alongside, all the services in a station’s boundary like stores or kiosks are integrated and support digital payment methods.

The digital yuan application characteristic that makes it distinct is it doesn’t need a phone signal to transmit. Likewise, it allows users to utilize the service until the phone battery ends.

Meanwhile, other cashless payment apps like ‘WeChat’ use a different structure. It requires an internet connection to proceed and charge a transaction fee, too.

Per a report, Guangdong Petroleum is in the process of extending its boundaries to over 110 gas stations to fix the self-operated ecosystem in Shenzhen within a month. China’s digital yuan has yet another milestone to achieve, Digital Currency Electronic Payment (DCEP). It falls in the country’s Five-Year-Plan brackets to develop and deploy the world’s advanced technologies such as blockchain and artificial intelligence.

In 2019, the Chinese Parliament declared to complete the digital yuan project before the Winter Olympics in 2022. In September, China decided to position the DCEP project as a workable option to reduce its dependency on the US dollar. This plan has become a hot topic.

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Author: Hank Klinger