The People’s Bank of China on Stablecoins
The People’s Bank of China (PBoC) has indicated that the demand for independent blockchain-based stablecoins is not pressing within the domestic market. This conclusion comes as the nation employs legal reserves to uphold the stability of its currency. In this environment, transaction fees for domestic services remain impressively low, often amounting to just a tiny fraction of a percent, significantly undershooting the rates charged by foreign payment platforms.
Current Payment Infrastructure
Given the efficiency and cost-effectiveness of the existing third-party payment infrastructure in China, the immediate need for widespread adoption of stablecoins appears to be minimal. As a result, established payment businesses are unlikely to face significant challenges from the rise of independent stablecoins in the short term.
Opportunities for Internet Firms
Conversely, internet firms engaged in cross-border transactions are increasingly venturing into the stablecoin sector. These companies enjoy inherent advantages that could facilitate the adoption of stablecoins:
- User Engagement: Major platforms such as Amazon boast a vast user base, with hundreds of millions of potential customers and well-developed payment scenarios, especially in areas like cross-border e-commerce, which could aid in the rapid deployment of stablecoin solutions.
- Technological Expertise: Leading internet companies possess robust research and development capabilities that can drive advancements in stablecoin technology.
- Complementary Ecosystems: The potential for synergy between business-to-business (B2B) supply chains and business-to-consumer (B2C) retail payments could amplify the network effects associated with stablecoin use, enhancing their appeal and functionality across various applications.
