04/07/2025

BIZ & FINANCE FRIDAY | JULY 4, 2025

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Commercial S. Korea assembly expands duty of boards to shareholders o Move may enhance investor confidence, MSCI market status upgrade possible

Chinese tech giants said to be lobbying for offshore yuan stablecoin BEIJING: China’s tech giants JD.com and Alibaba affiliate Ant Group are urging the central bank to authorise yuan-based stablecoins to counter the growing sway of US dollar-linked cryptocurrencies, people with direct knowledge of the discussions said. The two firms propose China allow the launch of stablecoins in Hong Kong pegged to its offshore yuan to help promote global use of the Chinese currency and fend off the dollar’s growing digital influence, the two sources said. The moves come as Hong Kong races the United States in setting up a regulatory framework for stablecoins, competing for a greater reach in global digital finance and trade. Their lobbying efforts, if successful, would mark a major shift in the way Beijing views cryptocurrencies, which it banned in 2021, and could reshape China’s strategy in promoting international use of the yuan. Stablecoins are digital tokens, in the form of cryptocurrencies pegged to liquid assets, so far mostly the US dollar but also in some cases gold or other currencies. Their underlying blockchain technology enables instant, borderless and round-the-clock transfer of funds at low cost, giving them the potential to disrupt traditional cross-border payment systems. Both JD.com and Ant already plan to issue stablecoins backed by the Hong Kong dollar, after the island’s new legislation takes effect on Aug 1. But in closed-door discussions with the People’s Bank of China, JD.com has argued that offshore yuan stablecoins are urgently needed as a tool to promote yuan internationalisation, the sources told Reuters. Such a view has also been expressed by other industry players. “The global expansion of US dollar stablecoins is posing fresh challenges to yuan internationalisation,” Wang Yongli, co-chairman of Digital China Information Service Group, said last month. “It would be a strategic risk if cross-border yuan payment is not as efficient as dollar stablecoins.” The global stablecoin market is currently small at US$247 billion, according to data provider CoinGecko. However, Standard Chartered Bank estimates it could grow to US$2 trillion by 2028. Over 99% of stablecoins are US dollar-denominated, according to the Bank for International Settlements. China has long harboured ambitions for the yuan to be a global currency, similar to the euro or dollar and reflecting its weight as the world’s second-biggest economy. One roadblock to this aim, however, is its reluctance to remove tight capital controls. The yuan’s share as a global payment currency fell to 2.89% in May, the lowest in almost two years, according to payment platform SWIFT. The dollar commands a 48.46% market share. “China has reached a point where it can no longer avoid taking action,” said Xiao Feng, chairman of crypto exchange operator HashKey. Many Chinese exporters now use dollar stablecoins as “more and more overseas merchants are sending payments in USDT”, he said, referring to the popular stablecoin Tether. – Reuters

domestic capital markets and the possibility of South Korea winning developed market status from index provider MSCI in the coming years,” said Seo Sang-young, an analyst at Mirae Asset Securities. The government plans to set up a task force to win the promotion, the vice-finance minister said this week, after the index provider said last month in its annual review that it would continue to monitor market accessibility in South Korea. The KOSPI rose 1.34% yesterday to close at 3,116.27 points, the highest since September 27, 2021, as investor sentiment was also buoyed by optimism around US tariffs after the trade deal with Vietnam reached by President Donald Trump’s administration. – Reuters

the and eliminating negative competition factors will make the situation better than now,” Lee said at a press conference held earlier yesterday. Lee said he had expected the country’s benchmark KOSPI stock index to rise above 3,000 points just by normalising the country’s system, after six months of leadership vacuum, and reaffirmed his pledge to usher in a period when the index tops 5,000. It has been part of Lee’s “KOSPI 5,000” initiative to amend the Commercial Act, along with other market reforms including winning an upgrade from emerging market to advanced market by global index provider Morgan Stanley Capital International (MSCI). “The amendment will raise foreign investors’ confidence in Act

SEOUL: South Korea’s Parliament passed yesterday a revision to the Commercial Act to expand the fiduciary duty of board members to protect the interests of minority shareholders, in a move aimed at boosting the country’s corporate market valuations. President Lee Jae Myung, who was elected last month, had pledged support for the legislation to help eliminate the so-called “Korea Discount” that has been a drag on the valuation of South Korean companies. The discount refers to the lower valuations that South Korean

companies typically trade on relative to their global peers, partly due to the dominance of family-owned conglomerates, which have been criticised for putting their interests ahead of other shareholders. A previous version of the bill approved by Parliament had been vetoed by the conservative government of Lee’s predecessor, but the latest version was a compromise backed by the conservative main opposition party. “I am confident that the stock market improvements of revising

US lifts chip software and ethane curbs on China NEW YORK: The United States has lifted restrictions on exports to China for chip design software developers and ethane producers, a further sign of de-escalating US-Sino trade tensions including concessions from Beijing over rare earths.

Synopsys, Cadence Design Systems and Siemens, three of the world’s largest electronic design automation (EDA) software developers, said on Wednesday they are restoring access to their software and technology for customers in China. Earlier in the day, the US also sent letters to ethane producers to rescind a restrictive licensing requirement on exports to China imposed in late May and June. The restrictions on EDA software developers and ethane producers were just some of many countermeasures imposed by Donald Trump’s administration in response to China’s export suspension of rare earths and related magnets in April. Beijing’s move on rare earths, part of retaliation against Trump’s earlier tariffs this year, has upended supply chains central to aerospace manufacturers, semiconductor firms, automakers and military contractors. The issue threatened to scupper a bilateral trade deal. On Friday, China’s Commerce Ministry said that following talks with the US, the two sides have confirmed a framework under which China will review export applications for controlled items while America will cancel corresponding restrictive measures. “The US have escalated to de-escalate. They put restrictions on many more items in order to get the Chinese to back off on rare earths,” according to a source familiar with discussions inside the American government. “As the US and China continue to hold to this framework agreement, we’re gonna see a lot of these restrictions go away. Going back to a status quo, where we were at in Feb/March,” said the

The Cadence Design Systems logo outside the company’s offices in San Jose, California. – REUTERSPIC

command more than 70% of China’s EDA market, Chinese state news agency Xinhua reported in April. It was not immediately clear if other countermeasures imposed by the US have been lifted. These include the suspension of licenses for GE Aerospace to ship jet engines for the C919 aircraft of Chinese airplane maker Comac and for nuclear equipment suppliers to sell to Chinese power plants. – Reuters

system updates to restore access and support to Chinese customers within three business days, according to a company letter to staff seen by Reuters. The US Department of Commerce did not immediately respond to Reuters’ requests for comment. Long-term restrictions on Chinese access to EDA software would have significantly hampered China’s chip design industry. Synopsys, Cadence and Siemens

source who was not authorised to speak to media and declined to be identified. Siemens said in a statement that it has resumed sales and support for Chinese customers after it was recently notified by the US Department of Commerce that export control restrictions for customers in China were no longer in place. Its shares rose 1.7% after market open yesterday. Synopsys expects to complete