Key Takeaways
- An article in China’s state newspaper called for the legalization of RNB-pegged stablecoins.
- The China Daily report echoes similar calls from Ant Group and JD.com.
- Proponents of the idea argue Hong Kong’s new licensing regime can be used as a platform to launch renminbi stablecoins.
With Hong Kong’s recent move to regulate stablecoins, there have been growing calls to use the legislation as a springboard to launch RNB stablecoins.
In the strongest indication yet that Beijing is open to the idea, on Monday, Aug. 11, an article in China Daily called for regulators to “support licensed institutions in Hong Kong to issue offshore renminbi-pegged stablecoins.”
Hong Kong Stablecoin Regulation as a Gateway to Digital Renminbi
Hong Kong’s stablecoin rules officially took effect on Aug. 1.
The Hong Kong Monetary Authority expects to grant its first licenses under the new regime by the end of the year. Meanwhile, the legislation has already sparked a surge in trading activity for the territory’s crypto exchanges.
Chinese Big Tech firms Ant Group and JD.com are among those that plan to apply for permission to issue HKD-pegged coins. But according to recent reports, both firms have also lobbied China’s central bank to authorize stablecoins pegged to the renminbi.
The companies reportedly argued that RNB stablecoins are needed to counter the advance of USD-pegged coined and foster the adoption of the renminbi as a global trade currency—one of Beijing’s top priorities.
Fighting Back Against USD Stablecoins
In positioning RNB stablecoins as a crucial buffer against digital dollarization, Ant Group and JD.com appealed to what has become a pressing concern for Chinese Communist Party (CCP) officials.
In the China Daily article, author Fan Yunpeng warned that the unchecked growth of dollar-pegged coins would “limit the space” for nondollar currencies like the renminbi in foreign exchange reserve allocations and as a cross-border trade instrument.
“By strengthening the attractiveness of dollar-denominated assets in the global reserve system, dollar stablecoins may limit the space for nondollar currencies—such as the renminbi—in foreign exchange reserve allocations.”
The article calls for China to leverage Hong Kong’s stablecoin regime to promote new digital renminbi initiatives. This echoes lobbying efforts by Ant Group and JD.com, and represents the first time a state-controlled outlet has openly endorsed the industry’s pitch.
In line with the government’s own digital currency project, it also suggests any future RNB-pegged coins should be integrated into China’s existing Central Bank Digital Currency (CBDC).
China Daily is opened by the CCP’s Central Propaganda Department and is a primary English-language mouthpiece for the government. Moreover, Fan Yunpeng is an associate research fellow at the a Chinese Academy of Social Sciences—a ministry-level research institute under China’s State Council.
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James Morales is CCN’s blockchain and crypto policy reporter. He has been working in the news media since 2020, writing about topics such as payments, banking and financial technology. These days, he likes to explore the latest blockchain innovations and the evolving landscape of global crypto regulation.
With an educational background in social anthropology and media studies, James uses his platform as a journalist to explore how new technologies work, why they matter and how they might shape our future.
