Why does Chinese cryptographic law currently support stubcoin over bitcoin?

After years of strict cryptography bans, China is now preparing to take its first major step towards stubcoin. the goal? To promote yuan support digital currency and compete in the growing global Stablecoin race.

But behind this change is deeper concern, fear of capital leaving the country and the increasing dominance of the silly stubcoin in US dollar support.

Let’s take a closer look at what’s going on.

China warms slowly and steadily

For years, China was strongly opposed to codes. It warned citizens not to invest in digital assets, exchanges, mining, and to invest in digital assets. But now the report suggests that China could approve the launch of its first stable rock.

China’s renewed interest focuses primarily on stubcoins tied to the renminbi (RMB). This change comes as the US is leading the global adoption of dollar-supported tokens and urges China to rethink its position.

According to the People’s Bank of China, Stablecoins are already changing the global payment system. In response, the authorities can discuss with financial experts and find the safest method.

But they made one thing clear. The stupidity allowed in China must follow the strict financial rules of the country.

Hong Kong is a test site

Even in China, where cryptography is banned on the mainland, conversations around Stubcoin are being featured. Hong Kong, often used as a cryptographic testing ground in China, has passed a new law that allows licensed companies to issue Fiat tokens.

But the officials are very cautious. Initially, only a small number of licenses are given, focusing on business use rather than individual users.

Strategies to maintain money in China

One of the key reasons behind China’s interest in stubcoin is to stop capital from flowing abroad. Authorities fear that if they continue to use US dollar-backed stubcoins like USDT and USDC, it could weaken China’s grip on its financial system.

To counter this, China could support the development of yuan-backed stubcoin. This is a digital token that can strengthen the yuan’s position in global trade while maintaining money within China’s borders.

Balance of control and innovation

China’s central bank has publicly expressed concern about how dollar-based Stablecoins will increase the economic impact of the US. China wants to oppose this trend, but it is also deeply cautious.

Experts warn that once stubcoins are released to the market, they are difficult to get full control. The risk is that money can leave the country in a way that regulators cannot easily track or stop.

Not all ciphers’ green light

It is important to note that this is not a complete reversal of China’s cipher ban. The country has not yet allowed open transactions for Bitcoin or Ethereum. However, by allowing certain stub coins, China may have opened a door wide enough to test the water without giving up control.