From Mobile Payments to Stablecoins: CEO of JD Coin Chain Talks About New Era Payment Tools

In 2011, Liu Peng, who was then working in a payment team, purchased his first bitcoin. He did not do it for speculation, but rather with a questioning mindset, wanting to explore whether this cryptocurrency, which had no pegged assets, was just a scam. More than ten years later, he led his team to research stablecoins, but this time the goal was not to purchase, but to issue.

In early June this year, Liu Peng, the CEO of JD Coin Chain Technology, accepted an exclusive interview with a commercial magazine. He emphasized that stablecoins are different from cryptocurrencies like Bitcoin and Ethereum, and are more like "payment tools" similar to mobile payments. Liu Peng is a veteran in the payment industry and has been deeply involved in the design and promotion of a well-known mobile payment product. After that, he took charge of payment business in several large enterprises. Now, Liu Peng stated that he feels an atmosphere similar to the eve of the mobile payment explosion—he believes that payment-type stablecoins will serve as new financial infrastructure in the Web3 era, playing a "disruptive" positive role in areas such as international trade.

Stablecoins, with advantages such as decentralization, low transfer costs, and transparent and traceable transactions, are moving from the crypto world into a broader traditional financial system. On May 30, Hong Kong officially published the "Stablecoin Ordinance," marking that this international financial center will clearly regulate stablecoin activities related to Hong Kong and the Hong Kong dollar through a licensing system. As early as December 2023, Hong Kong announced the implementation of a licensing system for fiat stablecoin issuers; in July 2024, three institutions, including JD Coin Chain, entered the sandbox for stablecoin issuers launched by the Monetary Authority for related testing.

Liu Peng revealed that the JD Coin Chain is making smooth progress in scenario testing within the sandbox, and plans to launch stablecoins pegged to the Hong Kong dollar and other coins.

Jingdong Coin Chain was registered and established in Hong Kong in March 2024, and is a subsidiary of a large e-commerce group’s technology company. Although it has been established for a relatively short time in Hong Kong, Liu Peng believes that one of Jingdong Coin Chain's first-mover advantages is having a "cold start" scenario from zero to one, which is the e-commerce ecosystem. He mentioned that if compliant stablecoins can be issued, a vast number of merchants on the platform can use stablecoins for upstream and downstream settlements to improve efficiency, and manage funds more flexibly overseas.

In a market where USDT and USDC account for over 80% of the dollar stablecoin share, licensed issuers in Hong Kong need to find other attractions, including use cases, in addition to the "compliance" advantage of the stablecoins they issue. Among them, cross-border payments are undoubtedly a place where many stablecoin issuers "show their talents." At the same time, retail payments also have positive significance in enhancing the market penetration and brand building of stablecoins.

Starting from August 1, the "Stablecoin Regulation" will officially take effect. Globally, places like Singapore, the European Union, and the United States have successively brought payment-type stablecoins under regulation, making the existing stablecoin market, with a scale of about $250 billion, increasingly hot.

In the future, will compliant stablecoins drive a paradigm shift in payments, further advancing mobile payments from "offline to online" to "online to on-chain"? Can Hong Kong leverage stablecoins to consolidate and enhance its key position in international trade? In an era where multiple currencies are pegged to stablecoins, how will the global payment and financial system change? These questions are worth our deep consideration.

Stablecoin Testing and Development Plan

As of early June, JD Coin Chain mainly conducted tests on the Hong Kong dollar stablecoin and will later test other fiat stablecoins. Based on market demand, it is expected that the two stablecoins will be issued simultaneously. The second phase of testing will focus on the application of stablecoins in three practical scenarios: cross-border payments, investment transactions, and retail payments.

In the cross-border payment scenario, the JD Coin Blockchain plans to expand its user base through direct customer acquisition and non-direct customer acquisition (such as collaborating with compliant wholesalers). In terms of investment trading, it is in discussions with global compliant exchanges to launch JD stablecoin in different regions. In the retail aspect, the first implementation is at the Hong Kong and Macau site of a global e-commerce platform, where users can shop using stablecoins in the self-operated e-commerce scenario.

JD Coin Chain expects to obtain a license in early Q4 this year and simultaneously launch a stablecoin. The stablecoin will be issued on a public chain, and anyone can publicly access data such as the issuance volume.

The Competitiveness and Application Prospects of Stablecoins

Liu Peng emphasized that "compliance" is the core competitiveness of issuing stablecoins in Hong Kong. The goal of JD's stablecoin is not to compete in scenarios such as native crypto or investment trading, but to explore a new "battlefield", which is to connect the traditional cross-border trade settlement market. This market has a large number of physical enterprises, cross-border trade participants, payment technology companies, etc., who need safe, compliant, and transparent audit-able stablecoin services.

Within the JD ecosystem, the payment settlement for the global sales in Hong Kong and Macau will first use JD stablecoin. Outside the ecosystem, the JD coin chain plans to create tailored stablecoin payment solutions for different industries. The transfer time for JD stablecoin will be reduced from several days to seconds, and costs will be at least halved compared to traditional transfers, with faster on-chain fund turnover.

Similarities and Differences Between Stablecoins and Mobile Payments

Liu Peng believes that payment stablecoins are completely different from cryptocurrencies like Bitcoin and Ethereum. Like mobile payments, stablecoins are essentially payment tools aimed at reducing costs and increasing efficiency through advanced technology and business models, enhancing user experience, and promoting inclusive financial development.

On the technical level, stablecoins are based on a decentralized technical architecture; on the product structure level, stablecoins have an issuance system that mobile payments do not. Therefore, the regulation of stablecoins is relatively complex and requires global compliance coordination.

Outlook on the Hong Kong Stablecoin Industry Ecosystem

Liu Peng believes that the key is to establish a risk-based, pragmatic, and flexible open ecosystem in accordance with the requirements of the "stablecoin regulations," where regulators, issuers, wholesalers, scenario providers, users, and investors need to cooperate with each other. He suggests leveraging the role of Hong Kong as an international financial center and trade center to seize the breakthrough point of fund settlement, expanding the circulation and usage of stablecoins issued in Hong Kong in multiple regions, further making Hong Kong an international stablecoin settlement hub.

Regarding the issuance of offshore RMB stablecoin, Liu Peng stated that there is not much technical difference from the HKD stablecoin, and potential application scenarios such as the Belt and Road Initiative are already in place. However, whether it can ultimately be realized still depends on mainland regulations.