• Mon. Jun 24th, 2024

KuCoin Ventures, the venture division of KuCoin, a crypto exchange that focuses on China but is registered in Seychelles, was in charge of a ten-million-dollar funding for the provider of CNHC, a virtual asset linked to the price of the yuan.

The stablecoin CNHC is tied to the yuan, also called CNH, to distinguish it from China’s onshore currency CNY, with a 1:1 ratio. The CNH reserves are held in a depository institution located in Hong Kong.

According to Justin Chou, the head of KuCoin Ventures and the Chief Officer of KuCoin, the investment in CNHC is a component of KuCoin Ventures’ larger plan to invest in the APAC region’s Web3 infrastructure.

Chou added that Hong Kong already possesses a properly developed traditional finance environment and has a chance to become the world’s new crypto hub due to regulations and policies for the next generation of virtual assets.

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CNHC is available on both Conflux and Ethereum blockchains. According to data on-chain, Ethereum has one hundred and two transfers and twenty-three token holders, while Conflux has more token holders with one thousand four hundred eighty-seven and six hundred six transfers.

According to Fan Long, one of the co-founders of Conflux, their blockchain is attracting most of the capacity due to its adherence to regulatory standards in China.

As per a note provided to CoinDesk, the importance of CNHC lies in its ability to link traditional financial structure with the developing Web3 environment, particularly during the increased regulatory examination in the United States. It also provides a viable option for users and businesses seeking compliant alternatives outside the US-based regulatory structure.

Seeking an Alternative to the U.S. Dollar

Most stablecoins are supported by the U.S. dollar, with only a few linked to other global currencies such as the Pound, Euro, Canadian, Australian, or Singaporean. However, these stablecoins differ from the capacity of USD-backed assets such as USDC or USDT.

Some CoinDesk columnists have argued that the dominance of USD-backed stablecoins has strengthened the position of the U.S. dollar in the financial world. As a result, they believe that the emergence of the next financial landscape, governed in U.S. dollars, is advantageous as it expands U.S. guideline formulation into the digital space.

However, some individuals wish to avoid adhering to U.S. regulations, particularly if they have zero connection to the nation. Additionally, U.S. regulators must be more apprehensive about allowing the cryptocurrency industry unrestricted entry to the American banking structure once strong state oversight is implemented.

The market does not favor the concentration risk centered on the U.S., as it is evident that USDC was bashed off its peak during the cryptocurrency banking catastrophe until recently re-established it. However, smart money remains skeptical about the stability of the peg.

Arthur Hayes, the co-founder of BitMEX, believes that the solution to the current situation is a BTC-derivatives-linked algorithmic asset known as NakaDollar. However, the market may be hesitant to embrace this concept, given the failure of Terra in the previous year.

Although CNH has succeeded in China’s offshore market, which was its intended purpose, cryptocurrency presents a distinct challenge. Some remain skeptical of it. According to information from CoinDesk, the CEO of Taipei-based Maicoin, Alex Liu, expressed his opinion that the RMB is strictly regulated on and offshore to make it viable.

Megan Ford

Megan Ford

Megan Ford is an accomplished news writer with a talent for capturing the essence of a story. With a keen eye for detail and a dedication to accuracy, her articles provide readers with a captivating and well-rounded perspective on current events.

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