JD.com enters the stablecoin game: China and the US step up competition in digital payments

JD.com enters the stablecoin game: China and the US step up competition in digital payments

Chinese e-commerce giant JD.com has announced ambitious plans to enter the world of stablecoins, marking a significant step in the global competition for digital currencies. The company is looking to take advantage of the new regulatory environment in the US, specifically the GENIUS Act, which was recently passed by the US Senate, to expand its international footprint.

Planned stablecoins aim to revolutionise cross-border payments

Liu Qiangdong, founder and CEO of JD.com, revealed during a Tuesday briefing in Beijing that the company plans to apply for a license to issue stablecoins in all key countries where there are sovereign currencies. The main aim is to significantly reduce the cost of global transactions and speed up settlement - instead of the traditional two to four-day process via SWIFT, JD.com wants to deliver payments in 10 seconds with savings of up to 90%.

"We want to enable faster and cheaper global payments," Liu said. "Our goal is to create a stablecoin that will support cross-border transactions, mainly between businesses, but also later for consumers."

Expansion into the retail sector and global ambitions

Initially planning to focus on B2B payments, however Liu hinted that consumer payments could come after a successful launch, expanding JD.com's influence in the retail sector. "After the introduction of business-to-business payments, we can move to direct-to-consumer payments," he said.

The company maintains its core business model focused on supply chain and global expansion, with plans to strengthen its existing business models and build them into international platforms.

China strengthens digital currency and stability

In the context of these moves, recent announcements by the Chinese government are also worth noting. Pan Gongsheng, Governor of the People's Bank of China, announced the establishment of an international centre for the digital yuan in Shanghai. This move reflects China's intention to accelerate the internationalisation of its digital currency and reduce its dependence on the US dollar.

JD.com has already started using the digital yuan (DCEP) for payroll, B2B payments and interbank settlements in 2021, reducing dependence on traditional payment systems.

Regulatory environment and global interest in stablecoins

JD.com's entry into the world of stablecoins comes at a time when interest in digital currencies and stable cryptocurrencies is increasing worldwide. The passage of the GENIUS Act by the US Senate represents a significant step towards the regulation and adoption of stablecoins at the federal level. The Act aims to create clear rules and protection mechanisms for stablecoin projects, which may spur further innovation and investment in the sector.

Jeremy Allaire, CEO of Circle, which issues one of the most widely used stablecoins, suggested that a key moment is coming when digital currencies will gain greater programmability and integration into the global economy. "We are on the cusp of an era where digital dollars will be fully programmable and will have a major impact on internet payments," he said.

The future of digital currencies is uncertain, but one thing is clear - competition between China and the US is heating up, and with it the development of innovative payment technologies. JD.com's actions show that the global digital economy is on the cusp of fundamental changes that could greatly simplify and cheapen cross-border transactions and propel the financial sector into a new era.

Related: a digital asset centre is being set up in Malaysia to test stablecoin and programmable money, confirming global interest in innovative financial technologies.

Conclusion

JD.com's entry into the world of stablecoins is not only a strategic move by the Chinese giant, but also evidence of the growing interest in digital currencies and their potential to transform global payment systems. With the backing of new regulations in the US and growing interest from Chinese institutions around the world, digital currencies are likely to play a key role in the future of the global economy.

*This is not an investment recommendation.

Coingarage team