KuCoin invests $10 million in yuan-pegged stablecoin CNHC

abdelaziz Fathi

KuCoin Ventures, the investment division of cryptocurrency exchange KuCoin, has made a strategic investment in Chinese yuan-pegged stablecoin issuer CNHC.

The $10 million funding aims to foster the stablecoin issuer and blockchain-based payment service provider and strengthening their position in the market. Alongside KuCoin Ventures, the growth investment round was bankrolled by prominent industry investors, including IDG Capital and the investment arm of USDC issuer Circle.

CNHC is a stablecoin that’s fully collateralized and backed by offshore Chinese yuan (CNH) at a ratio of 1:1. Pending approval from the Hong Kong’s regulators, its core applications will be money transfers, cross-border trade settlements, and liquidity management.

Created to satisfy renminbi-biased crypto enthusiasts, CNHC can provide protection during periods of extreme volatility in the market while improving the risk and return metrics of crypto-investment portfolios.

CNHC, whose reserve assets are held in a Hong Kong licensed trust, is issued on Ethereum and Conflux Network. The latter is a strategic partner in the development of CNHC ecosystem.

Founded in early 2021 by Jack Chou and Joy Cham, CNHC Group is a blockchain technology company registered in Singapore and funded by VC investment institutions. The company claims to have processed in 2022 $40-50 million in monthly transactions via the USD-pegged USDT and USDC as well as the CNHC stablecoin.

The development comes nearly three months after the team behind TrueUSD (TUSD) launched its Chinese yuan-backed stablecoin, which it revealed will run on top of the TRON (TRX) blockchain as an TRC-20 token.

With China being the world’s second largest economy, its currency has become of great interest and value for crypto enthusiast. However, its unique monetary system features two versions of the national currency, the onshore yuan (CNY) and offshore renminbi (CNH). The latter came about as China began trying to internationalize its currency.

The main difference between the two is that the renminbi can be traded freely on FX markets, while onshore yuan trading is tightly controlled by the Chinese central bank.

Stablecoins have been a core part of the growth story for crypto and DeFi, with US dollar-pegged stablecoins being the de facto reserve currency of crypto thus far. Also, demand for stablecoins in the e-commerce and payment space has been surging as the fiat-backed tokens allow users and merchants to avoid volatility.

Moreover, online retailers and payment gateways benefited from faster, cheaper transactions as compared to credit cards and traditional payment systems. This trend was driven by growing interest in decentralized finance (DeFi) and OTC desks that use the token to settle block trades over-the-counter.

Read this next

Inside View, Institutional FX

Time for brokers to add options trading as volumes explode on high volatility

“Usually, adding options to the typical CFDs and equities offering leads to fragmentation of the platform technology as many brokers will need additional back-end and front-end components, and that could be an important barrier for them. Apart from that, legal hassle and costs associated with proper licensing of market data could be a barrier at first. We are seeing this trend among market data vendors and exchanges to make it easier and more affordable.”

Metaverse Gaming NFT

GCEX’s DeFi education and prime brokerage offering available in DubaiVerse

“We are excited to be part of the developments of The Sandbox and to join other top players in the region, including our regulator, Dubai’s Virtual Asset Regulatory Authority (VARA), as part of the DubaiVerse. This is a great opportunity to bridge the gap between Web3 early adopters and GCEX clients, building a community around Web3 and digital assets.”

Digital Assets

Circle wants Fed to back USDC stablecoin after “very serious stress test” with collapse of SVB

The collapse of Silicon Valley Bank allegedly proves Circle’s point that there is a need for its USDC stablecoin to be backed by the U.S. Federal Reserve with its U.S. dollars held at the Fed.

Digital Assets

Google searches for Crypto.com and Gate.io exploded by 300% amid FTX collapse

“The findings emphasize the importance of staying on top of market trends and being able to pivot strategies quickly and also offer valuable insights into the current state of the market and the behavior of traders, providing investors with valuable information to make informed decisions about their investments.”

Institutional FX

iS Prime reports £35m turnover, £16.2 million pre-tax profits, £37 cash balances

“We have plans in place to evolve the business over the next year, driving further growth for both iS Prime and for our clients.”

Industry News

Clearwater taps BNP Paribas to combine investment accounting/reporting solutions with custody

“We invite asset owners to explore our powerful, game-changing solution that fully leverages our award-winning technology platform and BNP Paribas’ suite of custody activities. Together with BNP Paribas, we aim to extend this solution to our key core markets.”

Executive Moves

XS.com hires ex-iFX EXPO Andreea Ilies as Global Head of Events

“I believe in 2023, events, trade shows and seminars will be of significant importance in the finance sector as we push forward with a more social and personalized approach to doing business.”

Executive Moves

FlexTrade hires ex-Fidessa Rajiv Shah as Head of Sales EMEA for sell-side OEMS, FlexOMS

“It’s an exciting time to join FlexTrade. From a business perspective, the firm has a demonstrable track record in creating and growing long-standing customer relationships through first-class support and a client-first approach. Alongside this, the advanced capabilities of FlexOMS make it one of the most compelling offerings available within the OEMS space.”

Digital Assets

DWF Labs invests $20 Million in Synthetix, token trading volume triples

Global Web3 venture capital and market maker DWF Labs has pledged an investment of $20 million to spur development in the growing ecosystem of Synthetix, a derivatives liquidity protocol on Ethereum.