OkCoin USA Confirms Plans To Issue A Stablecoin Backed By The Chinese Yuan

Chinese crypto exchange OkCoin, through its U.S arm OkCoin USA, will soon issue a fully-compliant stablecoin pegged to the Chinese Yuan (CNY).

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Chinese crypto exchange OkCoin, through its U.S arm OkCoin USA, will soon issue a fully-compliant stablecoin pegged to the Chinese Yuan (CNY).

The platform’s founder Star Xu revealed this in a series of tweets, whipping up the value and appropriateness of having such an asset.

OkCoin USA Confirms Plans To Issue A Stablecoin Backed By The Chinese Yuan

Stablecoins to help the crypto industry flourish

According to Xu, the Yuan-backed stablecoin will be ‘fully-compliant’ with the regulatory requirements. He added that it was time to embrace the emerging technology, which has made the launch of a new blockchain based asset pegged on the RMB inevitable.

Xu is very optimistic about the place of asset-backed cryptocurrencies and sees it as a tool that will bring the Chinese currency to the international stage. He also believes that the use of these assets within the financial space will have a significant impact on the entire crypto industry.

“Embracing the tide of technology, the launch of a Chinese Yuan- backed stablecoin is an inevitable trend, and it will significantly improve the internationalization of the RMB. OkCoin USA will launch a fully compliant stablecoin.”

Bullishly, Xu said that the use of “cryptographic money” had huge potential and could complement fiat use in the Chinese market.

Stablecoins are electronic cash

According to the OkGroup founder, stablecoins and electronic cash are essentially the same; the only difference being that for the latter “the central bank issues the currency and then it is distributed peer-to-peer.”

He also believes that having a CNY backed asset will in the long-term benefit the local currency to compete with the U.S dollar on the international scene. He added on that:

“Today, the amount of cash in China’s domestic monetary system is not small… the dollar-pegged (stablecoin) regulated by the US government will strengthen the penetration of the US dollar 100 fold.”

It is not clear on what the OkCoin chief based his valuation of a hundred-fold penetration of the US dollar. However, his optimism is reflective of widespread sentiments about the use of asset-backed cryptocurrency.

The rise of the stablecoin

Stablecoins are currently the hottest thing in the crypto industry, with recent reports suggesting that there are over 50 new projects in various stages of development.

Stablecoins have a stable value; basically, their price is fixed and changes very minimally. As a result, unlike most other cryptocurrency assets, these assets experience the lowest volatility against the all sovereign-backed currencies.

Over the last few years, the clamor to issue stablecoins that are tied the world’s major fiat currencies have been in the US and from Japan and China. The most popular and so far most successful coin has been Tether (USDT), a stablecoin pegged on the US dollar.

Several others have cropped up, including the IBM’s plans to use the Stellar (XLM) protocol to release a token pegged on the U.S dollar.

Another effort is from the Winklevoss twins, touted as a great “solid and stable” addition. The U.S-based Gemini crypto exchange launched their USD-backed Gemini Dollar in September after getting approval from regulators.

Just this week, we saw Japanese internet giant GMO confirm it has plans to release a stablecoin that would be pegged on the country’s fiat currency. It comes only days after another company, Chinese-based Grandshores, sought to raise funds for the creation of a yen-backed coin.

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