- Stablecoin regulatory framework progress in the US triggers a reaction from China.
- China’s tech giants urge the government to respond to the US stablecoin achievements.
- JD.com and Ant Group suggest a countermove to promote the Chinese yuan.
To counter an incoming US dominance in the digital asset space, China’s tech giants JD.com and Ant Group, an affiliate of Alibaba, are now urging Beijing to authorize a yuan-based stablecoin, a countermove after the U.S. passed the GENIUS Act for clarity on dollar-linked cryptocurrencies.
This proposal escalates the well-documented economic and trade battle between the two superpowers into the digital asset sector, with both nations now competing to set the standards for global digital finance.
China’s Proposal: A Yuan Stablecoin in Hong Kong
In their proposal to China’s central bank, JD.com and Alibaba-affiliate Ant Group have outlined a plan to launch stablecoins pegged to the offshore yuan in Hong Kong.
They believe the proposed countermove will promote the Chinese currency’s global adoption. The two firms further noted that a yuan-pegged stablecoin will neutralize the US dollar’s growing digital influence.
The tech giants’ proposal aims to close the widening gap between China and the US in digital finance, considering the effect of Beijing’s 2021 ban on cryptocurrency activities, which has significantly slowed down the industry’s development in the region. JD.com and Ant Group aim to reverse China’s strategy and use the opportunity to promote the international use of the yuan.
Related: China Bans Holding of Bitcoin and All Cryptocurrencies, Report Says
The Catalyst: U.S. Passes Landmark Stablecoin Bill
This push from China comes just after the giant step taken by the US towards achieving stablecoin regulation via a Senate approval of the Guiding and Establishing National Innovation for US Stablecoins Act (GENIUS Act), a legislative piece that aims to create clear rules for stablecoin issuers, including requirements for reserve backing, audits, and anti-money laundering compliance.
The newly passed bill also prioritizes consumer protection and national security.
Related: Senate Passes GENIUS Act 68-30 to Establish U.S. Leadership in Digital Asset Innovation
The Stablecoin Race: A New Battlefield for Supremacy
The parallel moves by Washington and Beijing has set the stage for a new kind of competition. Both regions foresee the opportunity to dominate the sector while competing for greater achievements in global digital finance and trade.
Both regions recognize the immense opportunity to dominate the stablecoin sector, which is increasingly seen as a critical infrastructure layer for international trade and finance.
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