Leading exchange KuCoin participated in a $10 million funding exercise for CNHC to support stablecoin adoption.
KuCoin recently led a $10 million funding initiative for offshore Chinese yuan stablecoin issuer CNHC. This investment by the leading crypto exchange’s investment is part of a broader scheme to support stablecoins.
In addition to KuCoin’s investor IDG Capital, the CNHC funding round also saw participation from other leading industry investors, including Circle.
Execs Weigh In on KuCoin-CNHC Development
Commenting on KuCoin’s involvement in the CNHC funding round, the exchange’s chief investment officer and KuCoin Ventures lead, Justin Chou, explained that “KuCoin is always interested in building a stronger infrastructure for the financial system.”
Chou also added that the new CNHC investment marks KuCoin Ventures’ first in a stablecoin-related project. Further speaking on the CNHC development, Chou noted:
“To ensure stability of the financial market, stablecoin designers need to find a balance between over-collateralization and efficiency. We are happy to see more algorithm-based stablecoins, but they need to prove their resiliency.”
The KuCoin chief investment officer also pointed out that there could be more real-world asset-backed stablecoins in the future.
As an issuer of the stablecoin pegged to the offshore yuan, CNHC also operates as a blockchain-based payment service provider.
CNHC co-founder Joy Cham explained that the decentralized payment service provider launched its offshore yuan initiative two years ago. In a media session, Cham described the yuan-pegged stablecoin as “more akin to a house settlement tool.”
CoinMarketCap data reveals that the CNHC stablecoin has a listing on a sole centralized exchange called TruBit Pro Exchange. However, Cham said there would be more centralized and decentralized exchange listings in the future.
Despite its yuan affiliation, Cham said CNHC supports settlement services in other popular stablecoins. These fiat-pegged digital assets include Tether (USDT) and USD Coin (USDC). However, Cham noted that the ongoing Silicon Valley Bank (SVB) and Silvergate crisis weighs heavily on CNHC’s workflow. As the stablecoin-issuer exec put it:
“Some of the banks are our partners that help us to settle USD, but there’s other banking partners, so service is still ongoing.”
KuCoin CEO Claims Exchange Unaffected by SVB, Silvergate Troubles
Meanwhile, KuCoin chief executive officer Johnny Lyu revealed that the SVB insolvency has no bearing on the leading crypto exchange. According to Lyu, KuCoin has no exposure to Silicon Valley, Silvergate, or Signature Bank.
Noting that “the whole market is exposed at varying degrees to USDC and USDT,” Lyu pondered crypto importance in traditional banking. According to the KuCoin CEO, removing digital currencies from mainstream banking could trigger “long-lasting implications on the industry.” Lyu also noted that “the recent shutdowns of financial institutions may be the opportunity for crypto to reach mass adoption.”
NYAG Lawsuit
The KuCoin-CNHC development comes on the heels of a lawsuit the exchange sustained for violating securities and commodities laws. Late last week, New York Attorney General (NYAG) Letitia James alleged that KuCoin disregarded state laws and put investors at risk. As a result, James seeks to hold the exchange “accountable” and restrict access to it in New York.
Tolu is a cryptocurrency and blockchain enthusiast based in Lagos. He likes to demystify crypto stories to the bare basics so that anyone anywhere can understand without too much background knowledge.
When he’s not neck-deep in crypto stories, Tolu enjoys music, loves to sing and is an avid movie lover.
