China competes in
Recent developments suggest that China performs strategic movements in the space of Stablescoin. The country has launched what seems to be the first stablecoin both in the world regulated in the world, called AXCNH. This happens at an interesting moment, just a few months after the United States adopted the Act on genius in July, which many considered the push of America for the domination of dollars stables.
Yang Guang, the Blockchain Project Conflux CTO confirmed the participation of his business in the launch of the AXCNH. He mentioned that although the launch did not have any international attention at the start, he could create what he called a “butterfly effect” on cross -border payments. It is probably not an exaggeration if we consider the extent of what China is trying here.
AXCNH strategic objective
AXCNH is specifically designed to be set at the Yuan Offshore, and its main objective seems to be improving the efficiency of cross -border payment between countries participating in the belt and China road initiative. It is not a small business – the BRI implies more than 150 countries and represents more than $ 1.3 billion of Chinese investment in the global sectors of infrastructure, energy and technology.
What is particularly interesting is how this stablecoin seems to serve several strategic objectives. Beyond payment efficiency, it also aims to reduce dependence on dollar-based systems and to potentially mitigate the risk of sanction. This last point could be the most revealing of the wider intentions of China.
Government influence and technical support
Industry sources suspect that Anchorx, the Fintech company of Hong Kong, publishing Axcnh, operates under an important influence of the Chinese government. The technical infrastructure comes from Conflux, which happens to be one of the few public blockchains to have received official approval from the Chinese authorities. It is not a coincidence, I think.
The Conflux network would have managed more than 3,000 transactions per second, which suggests that they are preparing for a serious volume. The moment of all this also deserves to note. When the United States adopted its stable legislation in July, the global market capitalization of stables increased by around 267 billion dollars. Since then, it has increased to more than $ 309 billion – an increase of 15.8% in just over two months.
Broader implications
This decision raises questions on the question of whether we see the start of a new type of monetary competition between the major powers. It is no longer just a question of the traditional domination of currency, but also who controls the digital payment infrastructure which will probably underpin future global trade.
The Belt and Road initiative offers China a ready to use network to deploy this technology. With so many countries that are already participating in BI projects, there is a natural ecosystem for digital payments based on the Yuan to gain ground. It remains to be seen if it calls into question the domination of the dollar, but it certainly adds another layer to the geopolitical competition in progress in financial technology.
Some analysts consider the BRI as an economic development program, while others consider it a vehicle to extend Chinese influence. The introduction of a stable coin in yuan in this context probably supports the two interpretations to some extent. What is clear is that competition from digital money becomes another front in broader economic rivalry between the great powers.
