Offshore Renminbi Stablecoin: Reshaping the Global Payment Landscape

The global monetary system is undergoing a major transformation. New payment methods centered around sovereignty, compliance, and efficiency are quietly emerging.

Recently, at a Web3 development conference held in Shanghai, the founder of a stablecoin project detailed the practices and development trends of offshore RMB stablecoins. With the growing demand for cross-border payments and the gradual clarification of regulatory frameworks in various countries, offshore RMB stablecoins are迎来重要的发展机遇.

From Hong Kong to Central Asia, and then to the countries along the "Belt and Road" initiative, this project is constructing a new digital Silk Road. This is not only a business innovation but also a strategic layout for diversifying the global monetary system.

Thoughts on Cryptocurrency in the Context of Traditional Finance

The founder of the project previously worked at well-known investment banks and private equity funds, with nearly twenty years of financial and investment experience. He stated that at the end of 2022 and the beginning of 2023, they judged that stablecoins could be the next significant opportunity in the cryptocurrency industry.

As an "infrastructure" connecting traditional finance with the crypto world, stablecoins can enhance cross-border payment efficiency and reduce settlement costs. However, before truly taking off, "compliance" will be the decisive factor.

In this context, Hong Kong's policy direction has become crucial. As an international financial center, Hong Kong has a recognized regulatory environment while reserving more operational space for financial innovation. By the end of 2023, relevant departments in Hong Kong issued a consultation document on stablecoin regulation, laying the groundwork for policy advancement.

From Kazakhstan to Hong Kong: The Landing Path of Stablecoins

In the context of rapidly changing global regulatory environments, the project has chosen a pragmatic compliance path. In May of this year, Kazakhstan's financial regulatory agency officially approved the project's license to issue offshore RMB stablecoin, marking the first official license related to stablecoins issued in the country.

This layout is highly aligned with the "Belt and Road" initiative. Kazakhstan is one of China's most important economic and trade partners in Central Asia, and in recent years, the annual growth of China-Kazakhstan bilateral trade has maintained around 20%-30%, providing real and continuous application scenarios for offshore RMB stablecoin.

As the world's largest offshore Renminbi trading center, Hong Kong will be the focal point of the project's long-term strategy. The founders stated that they have communicated with the Hong Kong Monetary Authority and plan to submit a formal stablecoin license application.

Restructuring Cross-Border Payments: Goodbye to the T+3 Era

Compared to the traditional SWIFT system, stablecoins demonstrate significant advantages in cross-border settlement efficiency. SWIFT is essentially an information flow system, where information flow and fund flow are separate, and a fund arriving often takes about T+3 days.

Based on a blockchain-based technical architecture, the project's stablecoin directly connects information flow and capital flow, achieving near-instantaneous fund arrival. The settlement speed is in seconds, generally completing confirmation within a minute, with a very significant improvement in efficiency.

Compared to the US dollar stablecoin, the offshore RMB stablecoin of this project will better meet the actual needs of Chinese enterprises' globalization layout. Many Chinese companies still have their cost centers in the domestic market when promoting overseas business, and using US dollars means that they ultimately need to convert back to offshore RMB, resulting in an additional currency exchange. Directly pegging to offshore RMB can simplify the process, reduce a round of exchange rate loss, and bring substantial savings to enterprises.

The Era of Multi-Polar Stablecoins: A New Trend in the Global Landscape

Regarding the global stablecoin landscape, the founder believes that in the future, sovereign currencies are likely to be mapped as stablecoins in some form, and the international monetary system may center around several important sovereign currencies, moving toward a multipolar balance structure. The share of the euro, the renminbi, and especially the offshore renminbi in the stablecoin market will gradually increase.

This trend has already been reflected at the regulatory level. Economies such as Hong Kong, the United States, the European Union, the United Kingdom, and Singapore have successively incorporated digital currencies into their regulatory frameworks, clearing obstacles for the growth of non-U.S. dollar stablecoins.

Currently, the share of offshore RMB in the SWIFT payment system is about 5%. If the stablecoin market size reaches $2 trillion in the future, the potential space for offshore RMB stablecoin could be as high as hundreds of billions of dollars.

The goal of this project is not only to become a stablecoin issuer but also to build an international payment network based on the offshore RMB, supporting outbound enterprises to connect more efficiently with countries along the "Belt and Road".

Conclusion

The power landscape of digital currencies is being reshaped. Regulatory actions around the world outline the underlying logic of a reshuffling global monetary system. The market space worth hundreds of billions of dollars is enough to accommodate multiple independent ecosystems that are not dependent on the dollar system.

In this global competition centered around technology, regulation, and currency, enterprises targeting the international market are transforming from rule adaptors to practitioners, participants, and co-builders of innovative technological solutions. The curtain on the era of multipolar stablecoins may be slowly rising in Hong Kong.