China has been experimenting with CBDCs for quite some time now. As of the beginning of the year, the People’s Bank of China reported that there were 13.61 billion digital yuan CBDCs in circulation. Thereon, the digital yuan’s use cases have only been expanding. Several factors, including the country’s Belt and Road Initiative, consumer airdrops, rising adoption, and acceptance as a means of payment for everyday activities, have played key roles in contributing to the growth.
However, Jeremy Allaire, Co-Founder and CEO of Circle, feel China should consider yuan-backed stablecoins instead of CBDCs. In a recent interview with South China Morning Post, he claimed that stablecoins are unique and could offer a more immediate solution for the government’s goal to internationalize the yuan. He elaborated,
“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 further gave the example of a stablecoin pegged to the offshore yuan [CNH] as an example of how this may work. However, the report highlighted that members of the team behind the stablecoin, CNH Coin, were detained in Shanghai in May. They are also associated with another coin pegged to the Hong Kong dollar called HKD Coin. Authorities, however, have not yet reasoned out why they have been detained.
Allaire expresses interest to grow in Hong Kong
Hong Kong released a conclusion on its discussion paper regarding crypto and stablecoins earlier this year. Allaire asserted that Circle is encouraged by the central bank’s plans. He exclaimed,
“We’re excited that this is a priority for the Hong Kong government and it seems like it’s a real priority for the HKMA. That’s tremendously positive and is really motivating for us to want to be able to grow our business here.”
Apart from eying Hong Kong, Circle is also looking to expand its reigns in Japan. As reported recently, Allaire stated that Japan could be a “very attractive” market for Circle. In fact, he also went on to assert that yen-linked stablecoins will be a new opportunity.