Chinese e-commerce giant JD.com plans to make an international foray into stablecoins – cryptocurrencies backed by a reference asset, typically a fiat currency like the US dollar – as these tokens are poised to become a major cross-border payment tool, according to founder and chairman Richard Liu Qiangdong.
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“JD.com intends to secure stablecoin licences across key currency markets globally … to reduce cross-border transaction costs by 90 per cent,” Liu said in a media briefing on Tuesday. “We hope that JD stablecoin will become a universal payment method worldwide.”
The announcement reflects Beijing-based JD.com’s confidence in the growing regulation of these virtual assets, nearly a month after Hong Kong passed a new stablecoin law that will take effect on August 1. The law requires stablecoin issuers in the city to obtain a licence from the Hong Kong Monetary Authority.
Jingdong Coinlink Technology, a subsidiary of JD.com, recently emerged as one of the bigger players in this space. The company, a participant in the city’s regulatory sandbox trial, is preparing to launch stablecoins pegged to both the Hong Kong dollar and the US dollar.
“I believe stablecoins will become the next-generation payment system – that is beyond doubt,” Jingdong Coinlink CEO Teddy Liu said at an event in Hong Kong earlier this month. He said the company may even issue an offshore yuan stablecoin, but added that it would only come with Beijing’s approval.
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In his keynote speech at the Lujiazui Forum in Shanghai on Wednesday, People’s Bank of China Governor Pan Gongsheng acknowledged the positive role of stablecoins, pointing out that these virtual assets are reshaping the global payment system and shortening cross-border payment cycles.
Still, Beiijing authorities continue to enforce a strict domestic ban against cryptocurrencies such as bitcoin.