People’s Bank of China Considers Supporting Yuan-Pegged Stablecoin Tokens
Earlier this week, CN Finance, a bi-weekly magazine and a mouthpiece of the Chinese central bank, published an op-ed entitled “A brief analysis of stablecoins” that was co-authored by a PBoC researcher named Li Liangsong and a professor from China's Fudan University.
The report investigated the latest progress of stablecoins in the world that have been mostly anchored to the U.S. dollars, including some that are backed by regulators such as the Gemini Dollar (GUSD) and Paxos Standard. The contributors went on to demonstrate that the development of these U.S. dollar-pegged cryptocurrencies will establish the prevailing role of U.S dollars in the global monetary system but may bring a negative effect on other major fiat currencies.
“If the U.S. dollar-pegged stablecoins can eventually be widely recognized by the market and can prove their use in the real economy, we should double down on our research efforts [on the issue] and learn from relevant experience to support domestic institutions to issue yuan-pegged crypto stablecoins.”
OKCoin's founder Star Xu touched on the same topic his Wednesday. he believes the “Trend of issuing a Chinese yuan stablecoin is inevitable. And OKCoin USA will participate in rolling out a regulated stablecoin.” However, the authors of the CN Finance article also pointed out there's still a long way to go before stablecoins can make a real impact on worldwide economies. They recommend an approach which is rooted in patience.
“If stablecoins can scale eventually, the role of central banks could be in a dilemma. Fiat currencies issued by central banks will become collaterals to back stablecoin but will not end up in the market circulation. That will limit the role of central banks in payment settlements and monetary policies,” the report said.