China is getting ready to introduce its first stablecoins as part of a larger initiative to lessen its dependency on the US dollar (USD), the Financial Times reported on Wednesday.
Since the mainland has outlawed the cryptocurrency business and a new stablecoin policy was just passed, Hong Kong has become China’s testing ground for cryptocurrency assets.
However, it is anticipated that any expansion will be slowed by regulatory caution and restricted licensing.
The stablecoin industry is gaining traction in China
According to a story published by the Financial Times on Wednesday, China intends to introduce its first stablecoins as part of a larger plan to internationalize the renminbi (CNY) and lessen its dependency on the US dollar for international payments.
According to the study, Hong Kong is becoming the testing ground for China’s cryptocurrency wager because the sector is prohibited on the mainland. However, regulatory prudence is still high in the autonomous territory, and only a small number of stablecoin licenses will be granted beginning in 2019.
The Financial Times states that HKMA officials stated that they had been extremely worried about market speculation and excitement.
With the implementation of the first stablecoin regulatory framework (GENIUS Act), the stablecoin market in China is expanding.
Nowadays, more than 99 percent of stablecoins are based on the US dollar.
In order to avoid capital regulations and currency hazards, Chinese exporters are increasingly using USDT for foreign payments.
Even with these continuous efforts, China still has a long way to go before it can catch up to the stablecoin environment supported by the US dollar.
