The e-commerce arm of Chinese cross-border tech behemoth Alibaba is working on a deposit token amid Mainland China’s crackdown on StableCoins, according to CNBC.
Alibaba President Kuo Zhang told CNBC on Friday report The tech giant plans to use technology like StableCoin to streamline transactions abroad. The model considered is a deposit token, which is a blockchain-based instrument that represents a direct claim on commercial bank deposits and is treated as a regulated liability of the issuing bank.
Traditional StableCoinswhich these tokens closely resemble, are issued by a private entity and are backed by assets to retain their value. The report follows JPMorgan Chase – the largest bank in the world by market capitalization – already reported Launching its deposit token to institutional clients Earlier this week.
The news also follows reports that Chinese technology giants, including ant group and jd.com, have suspended plans to issue StableCoins in Hong Kong After the regulators in Beijing has expressed displeasure with the plans. The report is the latest of many to suggest that Mainland Chinese authorities appear dead set on preventing a StableCoin industry from emerging in the country.
China says no to StableCoins
In July, both Ant Group and JD expressed interest in participating in Hong Kong’s Pilot StableCoin program or launching tokenized financial products, such as digital bonds. Similarly, HSBC and the world’s largest bank by total assets – the industrial and commercial bank of China – are reportedly share these ambitions with Hong Kong StableCoin in early September.
Related: Columbia business professor doubts tokenized bank deposits
Later in September, a now-deleted report by Chinese financial outlet Caixin said Chinese companies were operating in Hong Kong may be forced to withdraw from cryptocurrency-related activities. According to the report, policymakers will also impose restrictions on mainland companies’ investments in crypto and cryptocurrency exchanges.
In early August, Chinese authorities reportedly instructed local companies to Stop publishing research and holding seminars related to StableCoinsciting concerns that StableCoins could be exploited as a tool for fraudulent activities. However, China is not completely out of StableCoin ties.
Related: Custodia, Vantage Bank’s launch platform for tokenized deposits
Offshore Yuan StableCoins, not Mainland Money
In late July, Chinese Blockchain Conflux announced a third version of the public network and introduced a new one StableCoin is backed by Offshore Chinese Yuan. However, StableCoin aims to serve offshore Chinese entities and countries involved in China’s Belt and Road initiative – not the mainland.
In late September, a regulated stablecoin tied to the international Chinese version Yuan launched. However, this product is also intended for foreign exchange markets and was launched at the Belt and Road Summit in Hong Kong, which signed a similar target market.
In fact, a recent analysis suggests we shouldn’t expect it Chinese stables are allowed to go around the mainland. Joshua Chu, co-chair of the Hong Kong Web3 Association, said that “China is unlikely to issue StableCoins onshore.”
Magazine: Hong Kong is not the loophole Chinese crypto companies think it is
