JD.com and Ant Group are urging the People’s Bank of China to approve the launch of yuan-backed stablecoins in Hong Kong to counter the dominance of US dollar-backed stablecoins.
JD.com and Ant Group Apply for Stablecoin Licenses
Chinese tech companies JD.com and Ant Group are preparing to apply for stablecoin licenses in both Hong Kong and Singapore. Their initiative aims to reduce the influence of the dollar in global trade, according to a July 3 report from Reuters. It has been asserted that regulators have already given positive feedback on the proposal to initiate yuan stablecoin issuance first in Hong Kong and then in China’s free trade zones.
Yuan's Share of Global Payments Shrinks
The push for launching yuan-based stablecoins comes as the currency’s share of global payments fell to 2.89% in May, its lowest level in nearly two years. Meanwhile, the dollar maintains a commanding 48% share of global payments. Former deputy head of the Bank of China, Wang Yongli, warned that if yuan cross-border payments remain less efficient than dollar-pegged stablecoins, it poses strategic risks for China.
Hong Kong's Plans for Stablecoin Regulation
Hong Kong has already announced a new digital asset plan, which includes the regulation of stablecoins and promotes the tokenization of assets through its 'LEAP' framework. Starting August 1, the government will implement a licensing regime for stablecoin issuers with the goal of facilitating practical use cases. However, JD.com and Ant Group argue that this is not enough.
JD.com and Ant Group continue to promote their initiatives for yuan-backed stablecoins, emphasizing the need to strengthen the yuan's position on the international stage amid its declining share in global payments.
