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(Kitco News) - KuCoin Ventures, the leading investment arm of the KuCoin cryptocurrency exchange, has announced that it led the recent $10 million funding round for CNHC, a stablecoin issuer and blockchain-powered, cross-border payment service provider.
CNHC has created an offshore Chinese yuan-pegged stablecoin designed to collect payments from emerging markets. According to an announcement seen by Kitco Crypto, the other participants in the funding round included Circle Ventures and IDG Capital.
“We are excited that KuCoin Ventures led the investment in CNHC this time, and we also introduced IDG Capital and Circle Ventures as institutional investors in this round,” said Joy Cham, co-founder of CNHC. “CNHC is expanding its business not only in cross-border settlement but also in other scenarios, and we want to make ourselves part of the foundation and infrastructure in Hong Kong’s Web3 ecosystem.”
The cross-border payment arm of CHNC is focused on helping local exporters with collections, payments and settlements in developing countries that do not yet have an established banking system or financial infrastructure. Conducting cross-border settlement and remittance in these regions is expensive and slow, which CNHC looks to remedy with the introduction of its cross-border settlement network and stablecoins.
Through the integration of CNHC’s system, local residents will be able to make transactions for cross-border trading, E-commerce, traveling, overseas employment, and cross-border advertisements, among other use cases.
The stablecoin arm of CNHC, which processes an average transaction volume of $40-50 million per month, currently supports USD-pegged stablecoins like Tether (USDT) and USD Coin (USDC) as well as an offshore yuan-pegged CNHC stablecoin that is fully backed and pegged at a ratio of 1:1 with the offshore Chinese yuan.
CNHC created the stablecoin in an effort to address the demand from Chinese exporters for a stable and secure currency to facilitate cross-border transactions with developing countries, the announcement said. One of its primary use cases is to enable Chinese exporters to settle their trading using the yuan in order to avoid currency exchange risk.
CNHC is currently operating on the Ethereum network and on the Conflux chain.
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As part of its expansion into the APAC region, the stablecoin issuer is moving its headquarters to Hong Kong – which has been working to position itself as a hub for Web3 infrastructure and growth – in part because of the region's friendlier stance towards blockchain, which has led to an influx of blockchain-related talent.
“This investment in CNHC is part of KuCoin Ventures' broader strategy of investing in the Web3 infrastructure in the APAC region,” said Justin Chou, chief investment officer at KuCoin and lead at KuCoin Ventures. “Hong Kong has a well-established traditional finance ecosystem. With the regulation and new policy for next-generation digital assets, Hong Kong has a real opportunity at becoming the new crypto center of the world”.
CNHC’s stablecoin platform has a built-in trust structure that includes the custody of collateralized fiat currency and a framework of KYC/AML that ensures the platform remains in regulatory compliance. The market for CHNC has the potential to see $500 billion in annual transactions across unbanked regions in Africa, LATAM, and Asia.
