The recent arrest of the team behind Trust Reserve in China has caused quite a stir within the cryptocurrency community. Trust Reserve is responsible for issuing two stablecoins, backed by the Chinese Yuan (CNY) and the Hong Kong Dollar (HKD). Authorities detained the team on May 29th, and the reason for the arrest remains unclear. However, some speculate that it could be connected to China’s crackdown on digital payments not utilizing its RMB central bank digital currency (CBDC).
Trust Reserve raised $10 million in a Series A+ funding round led by KuCoin Ventures, with the participation of Circle and IDG Capital. Before the arrest, the company had around 60 employees and plans to expand its team. This event coincides with rumors that the Multichain core team may have also been detained in China. The protocol reportedly still has partial downtime, with no updates from the core team in China for more than a week.
China’s e-CNY, its CBDC, has grown significantly in recent times, now boasting 260 million wallets and expanded to 25 cities. The potential crackdown on Trust Reserve’s team could signify China’s firm stance on promoting the usage of its CBDC. China has enforced a strict ban on crypto trading and mining to ensure the widespread adoption of the e-CNY.
The Asian powerhouse also aims to reduce its dependency on the US dollar for cross-border transactions and replace it with its CBDC, further consolidating its hold on its financial ecosystem. While the arrest of the Trust Reserve team appears as a blow to the crypto community, it also highlights the increasing importance of the e-CNY as China’s preferred digital currency.
However, the lack of clarity regarding the exact reasons for the arrest has raised questions within the community. Are the Chinese authorities being overly aggressive in their approach to regulate cryptocurrencies, or is it a calculated move to ensure a smooth transition toward their CBDC? This uncertainty has caused mixed opinions among crypto enthusiasts.
To sum up, the arrest of the Trust Reserve team in China shows a possible inclination toward tightening regulations, especially for projects that can be seen as competitors to their CBDC. Participants in the market should keep a close eye on the ongoing events in China, as the eventual outcome could have a significant impact on the global crypto landscape.
As always, it is essential to conduct thorough market research before investing in cryptocurrencies. While current events can shed light on the state of the market, opinions can change, and the author and publication hold no responsibility for any personal financial loss.
Source: Coingape
