China is notorious for banning cryptocurrencies and making ICOs illegal. February 2019 is the month when China’s cryptocurrency isolation may change. The government of Hangzhou, the capital of China’s Zhejiang Province, chose Grandshores Technology to implement the first stablecoin in China.
Though the government supports blockchain technology, it has banned cryptocurrencies and ICOs. The board of directors at Grandshores Technology notified investors just a few days ago that Li Xiaolai has been appointed as executive director and co-CEO of the company with 49 percent equity in the company. This is a sharp pivot for the company whose main focus up until now has been on the maintenance and installation of mechanical and electrical systems for governmental buildings. Xiaolai is a known crypto investor who is reportedly worth over $1B.
He claimed last October that he was going to quit ICOs and cryptocurrency all together, because of all the fraudulent activities that have been reported.
Apparently, this opportunity was too good to pass up. Xiaolai, dubbed the Bitcoin "Evangelist," was hand-picked to lead this ambitious mission. With him at the helm, he is to steer the province to a cryptocurrency that is backed by foreign fiat. One of the interesting aspects about this project is that the stablecoin will use yen as opposed to yuan. One of the theories that Grandshores is using the Japanese currency as opposed to the local Chinese currency is not to anger the central Chinese government by using a local currency. The central government might not be too happy to see a local government indirectly financing a yuan-pegged stablecoin.