China is suffering from stablecoin FOMO. This likely relates in part to the huge success of the Circle IPO. The stablecoin firm listed at $31 with a current stock price north of $200. On Monday, Hong Kong listed company Goldstream Investment announced a collaboration with Hong Kong stablecoin issuer AnchorX to explore the issuance of an offshore RMB stablecoin. AxCNH would be used for cross border payments and to promote the use of the renminbi offshore. The result was a sudden 650% spike in the stock price of Goldstream, which is a subsidiary of China-based Hony Capital. That’s despite AnchorX announcing the same relationship with Hony Capital in February.
While AnchorX is based in Hong Kong, the city has not yet issued any stablecoin licenses. However, AnchorX’s Kazakhstani arm has an Astana license which it is using for the stablecoin. AnchorX is associated with Conflux, a public blockchain that has previously claimed it is affiliated with the Chinese government and regulated. It’s an assertion that naturally attracts skepticism, given the Chinese government’s reservations about public chains and crypto. And it’s also one that’s tricky to refute. The company has worked with China Telecom on a web3 SIM card.
Meanwhile, when offshore RMB stablecoins are issued, it’s likely the Chinese government will want the Hong Kong authorities to keep a tight rein on them.
Separately, the Beijing Internet Finance Industry Association warned that some companies are using a lack of understanding about stablecoins to attract investment. They are taking advantage of hype and “promising high returns and inducing the public to invest funds to participate in trading speculation.”
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