KuCoin Invests $ 10 Million in a Yuan Stablecoin CNHC!

Photo by PiggyBank on Unsplash

KuCoin recently took the initiative to lead a funding operation raising $10 million for an offshore Chinese yuan stablecoin issuer, CNHC.

This investment made by the most prominent cryptocurrency exchange is a component of a larger plan to promote stablecoins.

Circle was among the many prominent industry investors who contributed to the CNHC investment round. KuCoin’s investor, IDG Capital, was also one of the participants in this funding round.

Commentary from Executives About the Development of KuCoin and CNHC

Justin Chou, the chief investment officer of KuCoin and the lead of KuCoin Ventures, commented on the cryptocurrency exchange’s participation in the CNHC funding round.

He noted, “KuCoin is always keen on building a better foundation for the financial system.”

Chou also mentioned that this new investment in CNHC is the first time KuCoin Ventures has participated in a project related to stablecoins.

Chou made the following observations in continuation of his discussion on the CNHC development:

“Designers of stablecoins will need to strike a balance between over-collateralization and efficiency in order to fulfill their responsibility of maintaining the integrity of the financial industry. We are pleased to see more algorithm-based stablecoins emerging, but these coins still have to demonstrate resilience.

Moreover, the chief investment officer of KuCoin mentioned that in the not-too-distant future, there might be an increase in the number of stablecoins backed by real-world assets.

CNHC serves as a blockchain-based payment processor in addition to its role as an issuer of the stablecoin that is fixed to the offshore yuan.

Joy Cham, also a founder of CNHC, revealed that the decentralized payment system began offering offshore yuan trading two years ago.

At a session with the media, Cham used the phrase “more equivalent to a house settlement instrument” to characterize the yuan-pegged stablecoin.

According to data provided by CoinMarketCap, the CNHC stablecoin is currently listed on a single centralized trading platform, the TruBit Pro Exchange.

Yet, Cham predicted that there would be an increased number of centralized and decentralized marketplace listings in the future.

Cham stated that CNHC offers services in other prominent stablecoins, even though it is affiliated with the yuan. Tether (USDT) and USD Coin are digital assets tied to a fiat currency (USDC).

However, Cham pointed out that the ongoing crises at Silicon Valley Bank (SVB) & Silvergate significantly impact the workflow at CNHC.

As stated by the executive of the stablecoin issuer:

“Some of the banks are our partners, and they assist us in settling USD; however, there are other financial partners, and the service is still active.”

The Chief Executive Officer of KuCoin asserts that the Exchange Is Unaffected by SVB and Silvergate Troubles

In the meantime, the chief executive officer of the major cryptocurrency exchange, Johnny Lyu, stated that the insolvency of SVB does not affect the company in any way. Lyu claims that KuCoin has no ties or connections to Silicon Valley, Silvergate, or Signature Bank.

Lyu pondered the significance of cryptocurrencies in conventional banking after noting that

“the whole market is vulnerable at varied degrees to USDC and USDT.”

In the words of the chief executive officer of KuCoin, this might have “long-lasting ramifications on the business” if digital currencies were excluded from mainstream banks.

Moreover, Lyu mentioned that “the recent blackouts of banking firms may be the time for a crypto to attain mainstream adoption.”


NYAG Lawsuit

The establishment of KuCoin-CNHC follows closely on the heels of a lawsuit that the exchange was hit with for breaking regulations about securities and commodities.

At the end of last week, the Attorney General of the State of New York, Letitia James (3), made allegations that KuCoin violated state laws and endangered investors’ safety.

As a consequence of this, James is working toward “holding the exchange accountable” and limiting access to it within the state of New York.

Comments are closed, but trackbacks and pingbacks are open.

This website uses cookies to improve your experience. We'll assume you're ok with this, but you can opt-out if you wish. Accept Read More