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China’s Development of a Digital Currency Could Circumvent North American Banks

Aug 26, 2019
byOmar Abbas

Jeremy Allaire, CEO of global financial services company Circle, believes that China’s adoption of a national digital currency could transform the way Western-based companies settle transactions with China. Allaire is confident that China will start a trend by developing a cryptocurrency version of the Renminbi as it will likely bypass banking rules and regulations via direct money transfers.

“[Circle] also believes that the major reserve currencies of the world, the major trade currencies of the world, would become digital currencies,” said Allaire last week in a Global Coin Research podcast. “A digital currency version of renminbi that runs on software platforms that can be run over the internet, it really creates an opportunity for China and Chinese companies… and bypass the western banking system.”

A couple weeks back, officials from China’s central bank said the country is very close to launching a blockchain-based digital currency. After Facebook’s announcement of its Libra cryptocurrency project, China’s development its own digital currency has now been made a top priority.

Circle, the Boston-based financial technology company, launched its own version of a U.S. dollar stablecoin last year and is keeping a close eye on China’s cryptocurrency adoption. Allaire believes that a digital Renminbi makes sense in terms of the overall global financial framework.