Circle CEO doubts China’s embrace of cryptocurrencies

Circle CEO Jeremy Allaire, who runs the USDC issuer, harbours no illusions about the emergence of a crypto market in China, but is optimistic about Hong Kong. He said so in an interview with SCMP.

“The reality is that every other major financial market in the world uses digital assets, just as the largest financial institutions do. Therefore, for Hong Kong to be relevant, it must do so as well,” he added.

In his view, the mainland Chinese government backs Hong Kong Web3-initiatives.

Allaire also noted that stablecoins denominated in yuan could bring more benefits to the PRC than the existing CBDC.

“If the Chinese government wants the yuan to be used more freely in trade and commerce around the world, perhaps stablecoins are a more viable path than a central bank digital currency,” the head of Circle explained.

As an example, Allaire cited a stablecoin pegged to offshore yuan.

He also said Circle is encouraged by plans by the HKMA to regulate the sector — by 2024 the authority will introduce mandatory licensing for stablecoin issuers.

“We are pleased that this direction is a priority for the Hong Kong government and the HKMA. The situation is highly motivating for us to grow our business here,” Allaire concluded.

Earlier, Circle told of plans to issue a stablecoin in Japan. In his view, if this asset class is used in cross-border trade, the country could become an important market for the crypto industry.

Earlier, in July, the Hong Kong government proposed issuing its own stablecoin HKDG to compete with the sector’s existing giants such as USDT and USDC.