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Binance CZ: We Have No Immediate Plans for a Chinese Yuan-Based Stablecoin

By Sarah Tran   Dec 06, 2019 5 Min Read

Blockchain.News exclusive interview with Binance CEO Changpeng Zhao CZ, part 1.

 

Recent announcements have created waves in the blockchain industry. Binance has been making its way around the world, enabling better adoption and an overall understanding of crypto. With China’s President Xi Jinping urging its nation to use blockchain technology and its development, how is Binance leveraging on new collaborations around the world? 

 

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Project Venus: Enabling collaborations around the world 

 

Project Venus was announced by Binance 3 months ago as an open blockchain project, and an initiative to develop localized stablecoins pegged to fiat currencies worldwide. Binance invited government partners, enterprises, and organizations to collaborate with the exchange for this project. 

  

One of the stablecoins that CZ emphasized was the BUSD, which was approved by the New York Department of Financial Services (NYDFS). The BUSD has also been accepted by the Bermuda government to be used for tax payments. “That gives us very strong support even though it’s a relatively small country, with a small population, but still, I think the symbolic value is very strong.”  

  

However, there have been hurdles for different currencies, including China’s Renminbi (RMB). CZ explained: “There are a lot of concerns working with banks, how to get the fiat RMB to be as smooth as possible. I don’t think it’s going to be released anytime soon.” 

 

China wants everyone to understand what blockchain is 

 

CZ previously mentioned that the Russian President, Vladimir Putin, could be the most influential person in the crypto space. Shortly after, China’s President Xi Jinping publicly endorsed blockchain. He mentioned that he believes that regulations have a significant impact on cryptocurrency adoption. “I strongly and fully believe that the more favorable they are to the blockchain industry, the better the country will develop this market and increase the likelihood of becoming the leaders of the financial world tomorrow.”  

  

“China is very active now. I think that China is very centralized. President Xi Jinping has a lot of influence and straight-up power. When the leader of a country says something like that, everybody follows. Everyone I was in touch with before the announcement was reluctant about blockchain,” commented CZ. “From what I gather, people are pushing very heavily from the top levels of the government, pushing for education on blockchain. I think it’s very clear, China wants everyone to understand what blockchain is. I think China is very strong in this area.”  

 

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CZ also believes that the new development in China is a “huge positive sign” for the blockchain industry because education on blockchain in China will mean that the population will also need to learn about Bitcoin, smart contracts, and Ethereum. “I think that gets everybody to understand our industry whether they choose it or not. I think just by having 1.4 billion more people understand our industry is a huge plus.”

 

No immediate plans for RMB stablecoins 

 

He also believes that China’s digital currency electronic payment (DCEP) will come out very soon, issued by China’s central bank as a stablecoin. “That solves all of our problems. I’m speculating a bit because until it’s out, I don’t know what it’s going to look like. There are no immediate plans for RMB stablecoins from us right now. But we are very open to working with the government, including the Chinese government, if they’re willing to work with us.”  

  

CZ’s first guess regarding China’s CBDC is that it is going to be a blockchain version of the RMB. “From a technological perspective, you will almost definitely use different variations of blockchain technology, but it may be more centralized and definitely more centralized than Bitcoin, as a central authority issues it,” he added. 

  

However, he says that there has been minimal information about the DCEP. M0, which is the money supply in China, was rumored to be replaced by the country’s planned central bank digital currency (CBDC). “If it’s just used as M0, then it’s not going to be a huge amount of impact. I think eventually, the overall goal is to have the Chinese RMB to have more impact on the global ecosystem,” said CZ. 

  

“I don’t know any information that is not public. I know as much as you do, but from our perspective, if it gives people a larger degree of freedom and if it’s easier to transfer and easier to accept, then we would definitely support it. If it’s just M0, then it doesn’t have much to do with us, it’s just banks using it,” stated CZ. 

  

The CEO has the opinion that if the launch of China’s CBDC pushes other countries to adopt cryptocurrency as well, it would be a positive step for the industry as it allows for more education and adoption, especially in the financial sector. His view is that the more blockchain-based currencies, the better it is for the industry. “My understanding is the Chinese government wants to push blockchain influence globally so that they can be competing with us all with a dominant currency. In order to do that, they really need to push this currency to have more freedom. I hope that they are very successful, and we’ll have more choices in terms of which currencies people can choose from,” said CZ. 

 

STOs: ‘We’re happy to go second’ 

 

On Nov. 6, the Hong Kong Securities and Futures Commission (SFC) released new guidelines for crypto exchanges with an emphasis on securities virtual assets and tokens for trading. 

  

“I think that my understanding of the new regulation in Hong Kong mostly deals with securities, STOs (security token offerings) which we don’t really deal with right now. STOs involve a lot of regulatory work, which is not our specialty right now. We want to see some other people try it, and if it works, we’ll be the second. It’s harder for us to make a swift move, as we’re a big company. We’re happy to go second.” said CZ.  

 

Facebook’s Libra and Telegram’s TON 

 

Binance measures the metrics of how many users to view the potential of a new product. In terms of Facebook’s Libra stablecoin or Telegram’s TON, CZ believes that if these products get a large amount of audience and users, Binance would have “no choice but to support them.” CZ said: “We’re going to wait for them to come out, and we will see, we don’t want to judge too early.”  

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About the author

Sarah Tran   
Blockchain Journalist with a diverse background in the blockchain and crypto field.

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