Who controls your currency and will you have any choice?
Here is our pick of the 3 most important Stablecoin news stories during the week.
This week we saw maybe the biggest divergence in stablecoin global regulators with the West looking to go down a completely different path to China.
The central bank for central banks (BIS), is planning its own trial of a CBDC in collaboration with the Swiss central bank.
Revealed by Benoit Coeure, head of the BIS Innovation Hub, at the Bund Summit in Shanghai, Oct. 23–25, the proof-of-concept initiative would be underway before then end of the year and would open a route to experimentation looking at use cases for a wholesale CBDC.
The People’s Bank of China is soliciting public comments for the draft of Laws of People’s Republic of China on PBOC until November 23, according to its statement on Friday.
The proposed law recognizes the renminbi in both physical and digital form. The new version will essentially also clear the way for the digital yuan to be the one and only official yuan-pegged token in mainland China.
“To prevent risks associated with virtual currency, any other legal entity or individuals can not issue or sell tokens to replace the circulation of Renminbi.,” according to article 22 section 3 in the document.
The revision would take a toll on one of the biggest crypto-related businesses in China since many Chinese investors conduct crypto-to-crypto trading with stablecoins. Tether, one of the largest crypto companies, has a yuan stablecoin.
JPM are getting serious. According to a report on Tuesday, this real-world proof that the technology is increasing efficiency and reducing costs has bolstered the megabank’s confidence in the technology’s promise and profitability. With the expectation that further commercial clients will sign up to use the stablecoin, JPMorgan Chase has created a dedicated business devoted to digital currency and blockchain work.
The new business unit, dubbed “Onyx,” has over 100 staffers and is being led by Umar Farooq as CEO. Takis Georgakopoulos, JPMorgan Chase’s global head of wholesale payments, told reporters:
“We are shifting to a period of commercialization […] moving from research and development to something that can become a real business.”
So in summary, we have seen BIS announce the commencement for a pilot with the Swiss central bank for a wholesale coin that looks very much like the JPM coin which is now being moved into a real commercial footing, while in China it appears the State is going to pass into law that their can be only one stablecoin – theirs!
Alan Scott is an expert in the FX market and has been working in the domain of stablecoins for many years.
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