United States' Stablecoin Advancement Sparks China's Pursuit for Equality
China is reportedly considering the approval of yuan-pegged stablecoins that could be used globally, according to a report by Reuters. This potential move could be a significant sign that China is warming up to cryptocurrency, marking a possible reversal in its stance towards digital assets.
The Chinese central bank has already piloted its own central bank digital currency, known as the digital renminbi. If the yuan-backed stablecoins are approved, they could play a prominent role in a roadmap that is on track to be approved later this August. The focus of this roadmap on promoting greater yuan usage around the globe suggests China's interest in increasing its influence in the global financial system.
The exact nature and purpose of the yuan-pegged stablecoins China is considering remain unclear. However, the potential approval of the roadmap could mark a significant shift in China's stance towards cryptocurrency.
In the U.S., the approval of the roadmap, if it occurs, would be the latest development in the ongoing evolution of China's relationship with cryptocurrency. The U.S. fully embracing the nascent sector has reportedly prompted this potential reversal in China's stance.
The Genius Act, signed into law earlier this year, is a significant win for the crypto lobby in the U.S. The act establishes a comprehensive regulatory framework for the stablecoin industry. Treasury Secretary Scott Bessent views stablecoins as a generational opportunity to expand the dominance of the U.S. dollar, potentially resulting in up to $2 trillion worth of demand for U.S. Treasuries.
China's continued control of 21% of global Bitcoin hashrate, despite banning Bitcoin mining in 2021, demonstrates the country's ongoing interest in the crypto sector. In 2013, China initially cracked down on institutional usage of Bitcoin, and in 2017, it intensified its anti-crypto clampdown by banning initial coin offerings (ICOs) and pushing local exchanges offshore.
Hong Kong has already crafted a licensing regime for stablecoins, adding to the global momentum towards the mainstream adoption of digital assets. As the world watches, China's potential embrace of yuan-pegged stablecoins could reshape the global financial landscape.
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