Jun 01, 2023 12:25
The team behind CNHC Group, the issuer of CNHC, a stablecoin pegged to
the offshore yuan, and HKDC, one tied to the Hong Kong dollar, was arrested in
Shanghai, according to a local news outlet, PANews. CNHC Group has been renamed to Trust Reserve.
The team was reportedly taken away from their company building
in Pudong, Shanghai, by police officers and was detained. According to
PANews, which visited the offices of CNHC, the premises had a notice written 'Judicial Seizure, Strictly No Vandalism' signed on May 25.
As of press time, Finance Magnates is yet to get a response from CNHC Group about the development and will update this story once new information is available.
Chinese Yuan Stablecoin Issuer
CNHC stablecoin is fully backed at a 1:1 ratio to the CNH, the Chinese offshore yuan traded outside Mainland China. In March,
cryptocurrency exchange KuCoin, through its investment arm KuCoin Ventures, led
a $10m funding round for CNHC Group.
Technically, CNHC is
based on two blockchain networks, Ethereum and Conflux, the latter being an
Ethereum-compatible blockchain built for cross-border applications and
cross-chain operability. Conflux operates in China and has partnered with China
Telecom in a blockchain-integrated sim card project.
China Continues Crackdown on Digital Assets
China has imposed a ban on cryptocurrencies in stark
contrast to Hong Kong, which is re-establishing itself as a digital assets and
financial services hub. In October, the regulators in Hong Kong said they were
working to introduce
proper regulations governing digital assets similar to those in the traditional financial
space.
On the other hand,
Beijing is working
on a central bank digital currency (CBDC),
also known as the Digital Yuan, as an alternative to cryptocurrencies and the
underlying blockchain technology. With China marking major milestones with its Digital Yuan pilot, the
once-booming crypto industry continue to face facing tougher regulations.
Moreover, China is
creating a two-tier distribution system involving the People’s Bank of China and commercial banks to distribute the Digital
Yuan. The arrangements would see the apex monetary authority distribute the CBDC to commercial
banks, allowing customers to convert their fiat currencies to the digital currency.
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This article was written by Jared Kirui at www.financemagnates.com.
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