Circle co-founder bats for yuan-backed stablecoins in China

• Jeremy Allaire said that he was under no illusions that the China was opening up to cryptocurrency.
• However, Circle’s co-founder was encouraged by Hong Kong’s embrace of virtual assets.

Circle co-founder and CEO Jeremy Allaire believes that stablecoins pegged to yuan could be a better for the Chinese government’s goal of internationalizing its currency, as compared to central bank digital currencies (CBDC).

Circle is the issuer of USD Coin [USDC], the second-largest USD-backed stablecoin after Tether [USDT].

Allaire made these remarks during an interview with the South China Morning Post (SCMP). He divulged,

“If eventually the Chinese government wants to see the RMB used more freely in trade and commerce around the world, it may be that stablecoins are the path to do that more than the central bank digital currency.”

Allaire clarified that, though he views stablecoins as superior to CBDCs, the two systems are complementary.

China and Hong Kong look at crypto differently

Regarding China’s ban on cryptocurrency, the Circle CEO said that he is under no illusions that the Chinese government is opening up to cryptocurrency. But as Hong Kong is embracing virtual assets, there has to be a support of the Chinese government behind this action.

However, a local news report mentions that authorities detained the team behind the stablecoins, CNH Coin and HKD Coin, in Shanghai in May.

CNH Coin is a stablecoin pegged to the offshore yuan (CNH). On the other hand, HKD Coin is pegged to the Hong Kong dollar (HKD).

The Hong Kong Monetary Authority (HKMA) has vowed to implement regulations on stablecoins by 2024. Hong Kong is also participating in a cross-border blockchain pilot for the eCNY.

Allaire said that actions of the Hong Kong authorities have encouraged the crypto firm. Much of Circle’s business activity is in Asia now, its largest market outside the U.S. The company now has 125 employees in the continent.