CRYPTO MOVERS AND PRICES
CRYPTO STORY OF THE DAY
Yesterday, An Investor Close To Bitfinex (BFX) & Tether Leaked Details About A Planned Stablecoin That Would Be Linked To The Chinese Renminbi - The News Asks Questions About The Future of BFX's Relationship With China, Especially At A Time Where They Are Already Being Sued By The New York Attorney General (NYAG)
The information was released to CoinDesk by Zhao Dong, a Chinese OTC trader who is said to be an investor in BFX. Zhao has a history of being a reliable source of information on BFX related issues such as described, with what proved to be pinpoint accuracy, the LEO token offering before it was officially announced. According to Zhao, the new coin will be 'launched very soon, possibly within weeks,' and reserves would be held in a Belgian bank. Zhao's wallet and trading platform RenrenBit would support trading and deposits for the yuan stablecoin.
Takeaway: The most pressing question around the product, if released, is of course, 'how will the Chinese government react?' The country has strong capital controls with a maximum foreign exchange allowance of USD equivalent of 50k per citizen. Furthermore, officials have already disparaged Bitcoin as a vehicle for skirting those rules. The introduction of a yuan-backed stablecoin seemingly would make it a step easier for capital flight and arguably harder for regulators to police. BFX is already at odds with US officials in their lawsuit with the NYAG. The timing of the release of the new stablecoin, potentially also drawing the ire of China, intuitively seems risky.