Jeremy Allaire, CEO of Circle has urged China to consider yuan-backed stablecoins as an alternative to Central Bank Digital Currencies (CBDCs).
Speaking to the South China Morning Post, Allaire highlighted how stablecoins and CBDCs could act in harmony, with stablecoins providing immediate solutions for currency internationalization.
The stablecoins, Allaire believes, could potentially promote the global use of the renminbi (RMB), thus aiding in the internationalization of the Chinese currency.
“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,”
The Hong Kong Monetary Authority (HKMA) has expressed its intention to regulate stablecoins by 2024 due to their potential impact on financial markets and the necessity of a reserve asset value that aligns with the outstanding stablecoins.
Despite regulatory concerns, Allaire remains bullish about the prospects of Web3 development in Hong Kong and commends the HKMA’s steps towards stablecoin regulation. Viewing Asia as its largest non-US market, Circle is particularly encouraged by the Hong Kong government’s support for stablecoin regulation.
The future of cryptocurrencies in China remains a hot topic, with stablecoins potentially playing a key role in innovation alongside the emergence of CBDCs.
While the final outlook of China’s digital currency and stablecoin regulations remains to be seen, Allaire’s comments ignite a fresh perspective on the potential of yuan-backed stablecoins.