China may launch a RMB stablecoin, planning to debut in Hong Kong and Shanghai. This move is particularly distinct against the backdrop of China's crackdown on cryptocurrencies and promotion of the digital RMB.
In Cointelegraph's program, two experts—Martin Chorzempa from the International Institute for Economic Research and Patrick Tan, CEO of ChainArgos—analyze the potential of China entering the stablecoin space.
China's Position in the Stablecoin Competition
Reports indicate that Beijing hopes to enhance the role of the RMB in international finance. However, experts point out that while practical applications remain uncertain, the RMB stablecoin may play a role in cross-border payments.
'The RMB stablecoin may provide a new avenue for capital outflow.'
Related: A subsidiary of China Merchants Bank launched a cryptocurrency exchange in Hong Kong.
However, compared to the US dollar, the credibility of the RMB still has gaps. Chorzempa pointed out, 'If stablecoins are still restricted and monitored, they may not be attractive compared to the US dollar.'
Challenging the Dominance of the US Dollar
The difficulties in the market also exist. Tan stated that 98% of stablecoin trading globally is based on the US dollar. 'The largest crypto exchanges all use US dollar stablecoins.'
'To make the digital RMB attractive, China first needs to make the RMB attractive.'
Whether stablecoins succeed or not, it shows that stablecoins are no longer just part of cryptocurrencies, but have become part of global currency.
Listen to the full interview of Cointelegraph's Byte-Sized Insight. Available on Cointelegraph’s Podcasts page, Apple Podcasts, or Spotify.
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