Shanghai to Test Offshore Yuan Stablecoin on the Conflux Blockchain

Shanghai will use Conflux’s permissionless blockchain infrastructure to test an offshore yuan stablecoin in the city’s Lingang Pilot Free Trade Zone, according to a press release on Friday.

• The experiment will be conducted by the new Shanghai ShuTu Blockchain Research Institute established by Conflux and the state-owned Shanghai Maritime University, according to the statement.
• The Shanghai government confirmed the news with its own announcement Thursday.
• China’s central bank digital currency has been in trials since April 2020 but has been applied in only a few cross-border scenarios.
• Lingang’s Pilot Free Trade Zone was approved by the People’s Bank of China to test the free capital inflows and outflows and free currency exchange of the yuan in July. The region is pegged to be a high-end manufacturing and shipping hub.
• The financial liberalization is meant to support China’s cross-border trade and investments, according to state media.
• China is using restricted-access blockchains across a vast array of industries as it tests the technology, including in pilots for the central bank digital currency.
• The research center will also look into developing blockchain standards for trade and shipping, Conflux said.
• The area is also home to Tesla’s Gigafactory, as well as Siemens and General Electric manufacturing plants.
• The Shanghai government invested $5 million in Conflux in January.

UPDATE (Sept. 17, 23:02 UTC): Corrects headline and first sentence to identify yuan stablecoin.