Top Political Chinese Advisors Propose A Regional Stablecoin for Asia
As China continues to accelerate its role in the digital currency market, some of the top political advisors in China have proposed new regional stablecoin for the Asian market including four Asian economic giants - Japan, South Korea, China, and Hong Kong.
Sequoia China’s managing partner Neil Shen and a member of China’s upper house has put forward this proposal to the Chinese legislators during the country’s largest political gathering.
This proposal describes the currency as a “stablecoin” whose value shall be backed by a reserve currency. The proposal shall be led by the People’s Bank of China (PBoC) and would follow the SDR model of the International Monetary Fund (IMF) wherein each country’s currency shall be assigned a different weight based on its economy.
The advisors noted that the proposed stablecoin would help to accelerate trade among these four countries which will be crucial to the regions economic recovery after the major slowdown by COVID-19. This will be done by establishing a digital wallet for enterprises, improving cross-border settlements by establishing a new payment network.
Some of the prominent members from China’s business fraternity and political bureaucracy have co-signed the proposal. This proposal arrives out of the Chinese People’s Political Consultative Conference (PCC) on Thursday.
The PPC is an advisory body to China’s upper house comprising of different organizations and independent members to help the Chinese government take national-level decisions.
Sequoia Capital, the parent of Sequoia China is one of the biggest funding names in the venture capital (VC) world. Sequoia has been investing in the crypto space since long and has pumped around $10 million in one of the largest global exchanges - Huobi Group - based in China in 2014.
The proposal also mention having Hong Kong as the base for having a regulatory sandbox and scaling of the system for to improve cross-border payment services between the four countries.
The PBoC can work in collaboration with the Hong Kong Monetary Authority thereby creating a framework to regulate stablecoins cross-border transactions and manage risks, said the proposal.
The stablecoin could be launched prior to China’s national digital currency (Digital Yuan) and pave for the latter to establish a base. The proposal added that if launched, the stablecoin could help to “seamlessly” connect the Digital Yuan.
Well, currently in just the ideation phase, it remains to be seen if democratic economies like South Korea and Japan agree to join China, in case if it were to move forward.