Jeremy Allaire Urges China to Accept Yuan-Backed Stablecoins

Key points

• Jeremy Allaire, CEO of Circle, remains optimistic about Web3 development in Hong Kong and the efforts of the Hong Kong Monetary Authority (HKMA) to regulate stablecoins.
• Hong Kong is actively working on regulations for stablecoins to become a global virtual asset hub. The HKMA plans to introduce stablecoin regulations by 2024, recognizing the impact these products could have on financial markets.

Jeremy Allaire, CEO of Circle, remains positive about Web3 development in Hong Kong and the regulation of stablecoins. Despite China’s skepticism towards cryptocurrencies, Allaire sees stablecoins as a potential solution to internationalize the yuan.

Jeremy Allaire, the co-founder and CEO of Circle, a USDC stablecoin operator, is optimistic about Web3 development in Hong Kong and stablecoins’ regulation by the local monetary authority, despite not being under any illusions about mainland China opening its markets to cryptocurrencies.

While some officials from mainland China have expressed support for Hong Kong’s moves to court the crypto industry, there has been no indication that Beijing is warming up to crypto.

Nevertheless, stablecoins, which are typically pegged to fiat currency, could offer a more immediate solution for the Chinese government’s goal of internationalizing the yuan than the central bank digital currency (CBDC) eCNY.

Jeremy Allaire cited a stablecoin pegged to the offshore yuan (CNH) as an example of how this might work. The Hong Kong Monetary Authority (HKMA) has promised to roll out regulations on stablecoins by 2024, noting the potential impact such products could have on financial markets.

The HKMA has also been researching a possible digital Hong Kong dollar. There have been some questions about the future role of stablecoins in a well-regulated environment once CBDCs are available. For Jeremy Allaire, CBDCs are complementary and private coins still have a role to play in innovation.

Jeremy Allaire believes that stablecoins could be a more immediate solution for the Chinese government’s goal of internationalizing the yuan than the central bank digital currency (CBDC) eCNY. Allaire cited a stablecoin pegged to the offshore yuan (CNH) as an example of how this might work.

The Hong Kong Monetary Authority (HKMA) has promised to roll out regulations on stablecoins by 2024, noting the potential impact such products could have on financial markets.

Currently, USDC is the second-largest US dollar-backed stablecoin in the world by market capitalisation, after Tether (USDT). In addition, Circle has about 125 employees in Asia, its largest non-US market.

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