The citizens of Hong Kong are not interested in the digital yuan.

ASTL Token Project > Blog > The citizens of Hong Kong are not interested in the digital yuan.

While China has cracked down on cryptocurrencies on the mainland, it appears to be taking a softer approach to Hong Kong’s aspirations to create a crypto hub. Last October, the Hong Kong government floated the idea of introducing its own cryptocurrency regulation bill and allowing retail investors to “directly invest in virtual assets”, perhaps in contrast to China’s widespread ban on cryptocurrencies.

Beijing officials were not strongly opposed to the idea, according to people familiar with the matter. According to a March 1 Bloomberg report, it has been reported that representatives from the China Liaison Office are frequenting Hong Kong crypto gatherings in an attempt to understand what is going on. So far, their meetings with Beijing officials on the matter have been amicable, according to those familiar with them, which, according to local crypto business operators, Beijing – albeit very reluctantly – can and appears to approve of the use of Hong Kong in as a testing ground for cryptocurrencies.

Meanwhile, the Chinese government’s pet central bank digital currency (CBDC) project has not generated much enthusiasm among Hong Kong citizens. According to local press reports, in the city of Shenzhen (a Chinese satellite city of Hong Kong on the mainland, a free economic zone), for the first time in the whole country, machines for issuing hardware wallets for digital yuan were installed. Due to the city’s unique location as the gateway from Hong Kong to mainland China, the machines were programmed exclusively to serve the citizens of Hong Kong. The goal of the initiative, launched by the Bank of China and smart card provider Octopus Card, was to release 50,000 hardware wallets to customers by March 31st. Apparently, even a 20% discount on purchases from 1400 local sellers, subsidized by the state for CBDC owners, did not become a decisive factor for potential holders. In the first four days after “digital yuan” (also known as “e-CNY”) hardware wallets became available to islanders, only 625 Hong Kongers actually received them.

However, as noted by the Securities Times, local authorities will continue their efforts to promote the digital yuan for Hong Kong citizens, including a SIM-card hardware wallet project that will combine financial and communication functions. The reason lies in the big political mission to integrate the newly independent island city in the Guangdong-Hong Kong-Macau Great Bay area.

The adoption of e-CNY in the country is still quite slow, despite the efforts of the Bank of China. In October 2022, two years after CBDC entered the market, cumulative e-yuan transactions exceeded just 100 billion yuan ($14 billion). In February 2023, during the Lunar New Year, several cities reportedly gave away more than 180 million yuan ($26.5 million) of CBDC through programs such as subsidies and consumer coupons to speed up adoption.

Hong Kong is a special administrative region of China, which allows it to have its own laws and administration. The former British colony was returned to China in 1997 following Beijing’s guarantee that China would not interfere in the region’s economic and political systems for 50 years, known as the “one country, two systems” principle. National People’s Congress member and digital asset lawyer Nick Chan said that as long as there are no violations of “the main goal that does not threaten China’s financial stability,” the city can go about its business.

On Feb. 20, the Hong Kong Securities and Futures Commission laid out a new cryptocurrency licensing regime that requires all centralized exchanges operating in the region to be licensed by the regulator. The commission also proposed allowing retail traders access to licensed cryptocurrency trading platforms, saying public feedback highlights that denying access to cryptocurrency markets could push Hong Kongers to trade on unregulated overseas platforms. The new regulatory push has prompted many crypto companies to look to expand into the city. More recently, Huobi Global exchange said it has applied for a local license and plans to open a new exchange only in Hong Kong, with a focus on institutional investors and high net worth individuals.

Bitcoin is up 2.11% over the past 24 hours to $23,639, according to data from CoinMarketCap. Ether rose 3.57% to $1,663 on the week, up 1.24%.

Polygon rose 4.52% to $1.25. On Wednesday, the blockchain platform launched Polygon ID, a product based on zero-knowledge proofs (ZK) technology that allows users to issue verifiable credentials without revealing personal information. Litecoin rose 4.21% to $97.74. On Tuesday, crypto intelligence company IntoTheBlock reported that about 53% of Litecoin holders are making a profit, up from a low of less than 15% in 2022. Litecoin replaced Shiba Inu as the 10th largest volatile cryptocurrency by market capitalization and gained 2.76% in a week.

The total capitalization of the crypto market has grown by 1.57% over the past 24 hours to $1.08 trillion. And the total trading volume over the past 24 hours increased by 13.91% to 48.60 billion US dollars.

China’s February manufacturing activity data, released on Wednesday, returned to a nearly 11-year high, reflecting the country’s lifting of the Covid zero policy and offering signs that the world’s second-largest economy could help lift global trade and investment. However, US stocks closed broadly lower on Tuesday. The Dow Jones Industrial Average was virtually unchanged with a 0.02% drop, the S&P 500 fell 0.47% and the Nasdaq Composite fell 0.66%. Inflation and the interest rate policy of the Federal Reserve remain in the spotlight in the US. Reuters reported that there is discussion among Fed officials about whether more or less rate hikes are needed, and holding rates higher for longer is a more appropriate policy to bring down inflation and secure a soft landing for the economy. Recall that the Fed set US interest rates in the range of 4.5% to 4.75% in February, the highest since October 2007.

The little-known $TRU cryptocurrency has risen in price by almost 60% in a week after a massive crypto whale amassed about $1.18 million worth of it. Although the current market capitalization of this token is below the $100 million mark. The crypto whale bought 7.32 million TrueFi tokens ($TRU) worth about $500,000 on leading cryptocurrency exchange Binance earlier this week, according to data from blockchain monitoring service Lookonchain. Blockchain data shows that more than 17.6 TRU tokens were bought in the last week, worth more than $1.18 million. TrueFi is a decentralized finance (DeFi) protocol that aims to provide unsecured loans to its users through a peer-to-peer mechanism. The platform assesses the borrowers’ eligibility for loans using its own credit scores, thereby eliminating the need for a third party to repay a loan. Unlike traditional DeFi lending protocols that rely on over-collateralized lending, TrueFi provides borrowers with predictable loans, allowing lenders to earn attractive returns. According to Coinbase, the long-term goal of the platform is to create an automated, market-driven credit score and lending protocol.

The TrueFi platform has multiple features, including an exit anytime feature that allows them to provide loans without a lock-up period, competitive returns on many assets, and default protection with the TrueFi Secure Assets Funds for Users (SAFU) and staking mechanism. As a result of the accumulation of the whale, its price has increased by more than 57% over the past week. The cryptocurrency is up over 133% in the last 30 days and over 258% year to date. Prior to the whale accumulation, some analysts believed the price surge could be driven by news that Binance would mint hundreds of millions of dollars worth of TrueUSD (TUSD) stablecoin after the New York City Department of Financial Services (NYDFS) ordered Paxos to stop minting Binance’s BUSD token last month. However, the TRU price spike could be the result of confusion as TrueUSD appears to no longer be owned by Archblock, the company behind TruFi (formerly TrustToken). In 2020, Rafael Cosman, co-founder of Archblock, announced that ownership of TUSD is moving to an Asian consortium that will partner with Tron to design and develop the product.

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