China-based Conflux blockchain plans offshore yuan stablecoin, 3.0 upgrade in August

Conflux Network, a Chinese Layer 1 blockchain, has teased the launch of Conflux 3.0 and announced plans to help issue a stablecoin pegged to offshore yuan, as China explores the possibility of yuan stablecoins.

In a state media report posted Sunday on the Shanghai government's website, Conflux announced over the weekend at its conference that it has partnered with fintech firm AnchorX and Shenzhen-listed Eastcompeace Technology to develop offshore yuan-pegged stablecoins.

The trio said they plan to issue stablecoins pegged to the offshore yuan for use in countries participating in the Belt and Road Initiative (BRI). The BRI is China's flagship international development strategy aimed at promoting market integration and forging new economic ties. China has signed BRI memoranda of understanding with over 140 countries, including Singapore, Indonesia, Malaysia and Kazakhstan.

Conflux also announced the upcoming launch of Conflux 3.0. The team said that the 3.0 network is set to go live in August, with an advanced processing capability of 15,000 TPS, according to the report. The upgrade is also expected to enable large-scale settlement of cross-border payments and real-world assets.

Conflux's CFX surged 57% in the past 24 hours to $0.22 at the time of writing, according to The Block's price page. It has a market capitalization of $1.1 billion.

Eastcompeace Technology's stock jumped 10% to 20.33 yuan ($2.83) on Monday in Shenzhen, hitting the exchange's daily limit for price gains.

Earlier this month, Conflux said in a blog post that AnchorX is exploring the possibility of issuing "AxCNH," a stablecoin pegged to the offshore yuan, with technical support from the Conflux network.

The excitement surrounding stablecoins also builds on remarks from Chinese central bank chief Pan Gongsheng in June. The People's Bank of China governor acknowledged that stablecoins and central bank digital currencies are reshaping the global payment infrastructure.

With Hong Kong's licensing regime for stablecoin issuers set to take effect on Aug. 1, the prospect of offshore yuan-pegged stablecoins has become a hot topic locally. Chinese tech giants JD.com and Ant Group are lobbying China's central bank to approve offshore yuan-based stablecoins as the global stablecoin race intensifies, according to Reuters.

While China maintains its ban on crypto trading and mining, Hong Kong has taken a more open approach with a licensing regime in place for crypto exchanges.

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