CMC News

CNH Stablecoin Debuts as Global Currency Competition Intensifies

#AxCNH has launched as the first regulated offshore #Chinese yuan-pegged stablecoin at Hong Kong's Belt and Road Summit, intensifying global competition in digital currency markets. Financial technology company AnchorX developed the token to facilitate cross-border transactions within China's infrastructure initiative.

The Korean won-pegged KRW1 stablecoin also launched this week through BDACS, a digital asset infrastructure company. Both tokens feature overcollateralized structures backed 1:1 by fiat deposits and government debt instruments held by custodians.

China's trade with Belt and Road Initiative countries reached RMB 22.1 trillion in 2024, representing 50.3% of total Chinese trade volume. AxCNH targets this significant market by providing efficient settlement mechanisms for cross-border commercial activities.

AnchorX secured partnerships with major corporations, including Zoomlion, Lenovo, and China Brilliant Global, to explore payment applications and trade settlements. Zoomlion reported RMB 23.4 billion in overseas revenue during 2024, exceeding 50% of total company revenue.

#Stablecoins are achieving geo-strategic importance as governments rush to place fiat currencies on digital rails for increased international demand.

Blockchain-based settlement operates continuously with near-instant cross-border capabilities, addressing legacy financial system limitations.

Overcollateralized stablecoin issuers like Tether and #Circle purchase government debt instruments to back digital tokens, creating indirect bond-buying opportunities for global mobile phone users. This mechanism boosts government debt markets while reducing borrowing costs for sovereign issuers.

#Tether ranks among the world's largest U.S. Treasury bill holders, surpassing developed countries including Canada, Norway, and Germany in holdings.