CX Briefing: Beijing Warns of ‘Stablecoin’ Fraud

A rundown of the news making headlines in and around China:

Stablecoin fraud alerts: Beijing and Shenzhen issued warnings this week about fundraising scams using new concepts such as “stablecoins.” Some fraudsters have been using gimmicky terms and taking advantage of the public’s lack of understanding to issue supposed “virtual currencies” and other “digital assets,” soak up funds and induce the public to participate in speculative trading, the Shenzhen anti-illegal finance task force said Monday. These groups are also involved in illegal gambling, pyramid schemes, money laundering and a host of other criminal activities. On Wednesday, the Beijing Internet Finance Industry Association also issued a warning for people to be wary of illegal fundraising using new concepts such as stablecoins. Stablecoins are a type of cryptocurrency designed to maintain a stable value, typically by being pegged to a reserve asset — usually a fiat currency like the U.S. dollar. Calls have been growing for China to develop a yuan-pegged stablecoin in Hong Kong, which is positioning itself as a hub for digital asset trading.