Conflux Network's CFX Token Surges 57% Amid Stablecoin Venture

Conflux Network, a prominent Chinese Layer 1 blockchain, is on the verge of a significant network upgrade while venturing into the stablecoin market with a yuan-pegged digital currency designed for international use. The blockchain revealed its collaboration with fintech company AnchorX and Shenzhen-listed Eastcompeace Technology to develop a stablecoin tied to the offshore yuan. This initiative is part of a broader effort to extend China’s financial influence across Belt and Road Initiative (BRI) countries, including key regional partners such as Singapore, Indonesia, Malaysia, and Kazakhstan.

The proposed stablecoin aims to facilitate cross-border payments and commerce among BRI participants, leveraging blockchain infrastructure while adhering to Chinese regulatory preferences. This move aligns with broader state-level discussions on the role of stablecoins and digital currencies in reshaping the global financial system. Conflux also unveiled plans for Conflux 3.0, the network’s latest upgrade slated for release in August. With a reported transaction processing speed of up to 15,000 transactions per second (TPS), the upgrade is designed to enable large-scale settlement of real-world assets and cross-border payments.

Conflux’s native token, CFX, surged 57% in the past 24 hours, reaching $0.22 with a market cap of $1.1 billion. Meanwhile, Eastcompeace’s stock rallied 10% on the Shenzhen exchange, hitting the daily limit. Earlier this month, Conflux shared that AnchorX was developing “AxCNH,” a stablecoin backed by the offshore yuan and supported by Conflux’s infrastructure. The initiative aligns with comments from People’s Bank of China Governor Pan Gongsheng, who said in June that stablecoins and CBDCs are transforming global payments.

Major Chinese firms like JD.com and Ant Group are reportedly lobbying for approval to issue yuan-backed stablecoins abroad. Last week, former Deputy Finance Minister Zhu Guangyao urged integrating yuan-backed stablecoins into China’s top-level financial policy, citing the growing global role of dollar-pegged stablecoins. Speaking at a closed-door seminar, Zhu warned that U.S. dollar stablecoins serve as an extension of U.S. monetary dominance, calling them the “third phase” of the Bretton Woods system. He pointed to explosive stablecoin transaction volumes in 2024, surpassing Visa and Mastercard, and emphasized US efforts to consolidate regulatory control through new legislation.

Zhu proposed that China treat Hong Kong as a regulatory sandbox, develop both offshore and domestic yuan stablecoins, and monitor how the U.S. enforces stablecoin laws, especially against foreign issuers. He stressed that yuan stablecoins could diversify global payment systems and support currency internationalization without risking capital account liberalization. The move, Zhu argued, enhances the dollar’s global reach and liquidity while limiting space for non-dollar stablecoin growth. This initiative by Conflux and its partners is a significant step towards leveraging blockchain technology to facilitate international trade and financial transactions, aligning with China’s broader strategic goals in the global financial landscape.