Chinese Layer 1 blockchain Conflux Network is making headlines with a dual announcement: the upcoming launch of Conflux 3.0 and ambitious plans to facilitate the issuance of a stablecoin pegged to the offshore yuan (CNH). This development comes as China increasingly explores the potential of yuan-backed digital currencies.
In a state media report published Sunday on the Shanghai government’s website, Conflux confirmed at its recent conference that it has partnered with fintech firm AnchorX and Shenzhen-listed Eastcompeace Technology to develop the offshore yuan-pegged stablecoins.
The collaborative trio intends to issue these stablecoins for use in countries participating in China’s Belt and Road Initiative (BRI). The BRI, Beijing’s flagship international development strategy, aims to foster market integration and forge new economic ties with over 140 signatory countries, including Singapore, Indonesia, Malaysia, and Kazakhstan.
Adding to the excitement, Conflux also announced the imminent launch of Conflux 3.0, slated to go live in August. The network upgrade is touted to significantly boost processing capabilities, reaching an impressive 15,000 transactions per second (TPS), according to the report. This enhancement is expected to enable large-scale settlements for cross-border payments and real-world assets.
The news has already ignited market enthusiasm. Conflux’s native token, CFX, surged 57% in the past 24 hours to $0.22 at the time of writing, giving it a market capitalization of $1.1 billion. Shares of partner Eastcompeace Technology also jumped 10% to 20.33 yuan ($2.83) on Monday in Shenzhen, hitting the exchange’s daily price gain limit.
Earlier this month, Conflux had hinted at these plans in a blog post, stating that AnchorX was exploring the issuance of “AxCNH,” an offshore yuan-pegged stablecoin, with technical support from the Conflux network.
The growing interest in yuan-pegged stablecoins aligns with recent remarks from People’s Bank of China Governor Pan Gongsheng. In June, Pan acknowledged that stablecoins and central bank digital currencies are fundamentally reshaping the global payment infrastructure.
The prospect of offshore yuan-pegged stablecoins has become a hot topic in Hong Kong, especially with the region’s licensing regime for stablecoin issuers set to take effect on August 1. Reports indicate that Chinese tech giants JD.com and Ant Group are actively lobbying China’s central bank for approval of offshore yuan-based stablecoins as the global stablecoin race intensifies.
While mainland China maintains its strict ban on crypto trading and mining, Hong Kong has adopted a more accommodating stance, implementing a licensing regime for cryptocurrency exchanges.
