China Baowu Steel Group, the world’s second-largest steelmaker, will merge with domestic rival Magang (Group) Holding to come within striking distance of global top player ArcelorMittal.

Anhui Province’s State-owned Assets Supervision and Administration Commission, which owns Magang, will transfer a 51% stake to Baowu, according to a filing by listed Magang unit Maanshan Iron & Steel on the Shanghai Stock Exchange website Sunday.

The merger aims to strengthen international competitiveness, the Shanghai announcement said. The consolidation comes as China looks to boost profitability at domestic steelmakers in preparation for a drawn-out trade war with the U.S.

“This is a major step toward reaching the goal of 100 million tons a year,” a Baowu source said. Baowu’s current production volume is 67.43 million tons. Adding Magang’s 19.64 million tons will result in combined output of nearly 90 million tons — almost on a par with ArcelorMittal’s 92.5 million tons.

“We just need one more addition to the group to become the world’s No. 1,” the source said.

The Chinese government aims to push consolidation within the industry so that the top 10 players in China account for 60% of steel production, up from 35% today.

Baowu, China’s top steelmaker, is wholly owned by the central government’s State-owned Assets Supervision and Administration Commission.

The Baowu-Magang alliance’s bigger war chest would enable stepped-up capital investment as well as research and development.

Magang said it will push ahead with supply-side reform in conjunction with the direction set by Chinese President Xi Jinping. Consolidation of major steelmakers here will continue going forward, a brokerage analyst predicted. Reducing the number of companies will likely help resolve the issue of oversupply and boost the competitiveness of Chinese players.

China accounts for roughly half of global steel production. Production in the first four months of 2019 grew around 10% on the year, supported by demand for use in infrastructure projects.

Yet with automobile demand shrinking in China, and the outlook unclear for exports of home electronics with new tariffs kicking in, “China has to unite to strengthen the profitability of each steelmaker,” an industry insider said.

In the broader steel industry, the planned merger of India’s Tata Steel and Germany’s ThyssenKrupp was recently called off over fears that that the European Union would block a deal that would create a virtual duopoly in the common market. ArcelorMittal has announced that it will reduce production in Europe.

Amid uncertainties in the global economy, the consolidation in the Chinese steel industry — which accounts for half of the world’s top 10 steelmakers — will impact decision-making at each of the global players.

Major banks in Japan, the U.S. and Europe are developing a blockchain-based digital coin that can be used to instantly settle overseas money transfers instantly, lowering transaction costs by cutting out intermediaries.

The project will be run by Fnality International, a company recently established in London with about 50 million pounds ($63.1 million) in capital from 14 participating banks, including Japan’s MUFG Bank and Sumitomo Mitsui Banking Corp.; UBS, Credit Suisse and Barclays of Europe; and U.S.-based State Street. The Japanese banks are believed to have contributed several hundred million yen each.

Fnality will set up accounts at participating central banks and issue “utility settlement coins,” or USCs, digital equivalents of major currencies that can be converted into their paired currencies on a one-to-one basis.

Currently, cross-border transfers must go through multiple steps involving third-party intermediaries as well as the foreign exchange market if different currencies are involved, adding fees and other costs to the process. USCs will eliminate the need to buy the destination currency in the market, allowing for orders to be processed immediately.

Transmissions that currently take a full day, or even longer, will be carried out much more quickly.

When a commercial bank deposits funds in a Fnality account, it will receive USCs of equivalent value. These will be backed by central banks, mitigating the risk of price fluctuations and providing a more stable method for interbank transfers.

The system will initially work with U.S. dollars, euros, pounds, yen and Canadian dollars. Fnality plans to step up negotiations with central banks and aims to issue the first USC by late 2020.

Like bitcoin and other cryptocurrencies, USCs will use blockchain, record-keeping software that makes it difficult to falsify data on past transactions. But USCs will play a fundamentally different role from other digital currencies, as they are used only by financial institutions and are backed by central banks.

The Financial Times reports that Facebook continues to negotiate with the CFTC over plans for a digital currency.

• Will be a part of Facebook push in to payments, a new digital payments network to allow users to transfer money, buy items on the platform, its apps Instagram and WhatsApp, and across the wider net.
• plans a a “stablecoin” (a digital coin pegged to a fiat currency)
• Commodity Futures Trading Commission said its in “very early stages of conversations” with Facebook