Hong Kong Stablecoin Coming Soon?• July 5, 2023 1:21 pm • Comments
A Hong Kong stablecoin could be coming soon if current pressure from academics and researchers can convince policymakers to act.
According to a recent policy proposal from Wang Yang, Cai Wensheng, Lei Zhibin, and Wen Yizhou, the development of a Hong Kong stablecoin could help to solidify the special administrative zone as a crypto hotspot.
Moreover, the writers claimed that economic efficiencies created by the presence of a stablecoin pegged to the Hong Kong dollar would greatly improve liquidity markets.
It’s no secret that Hong Kong has been propelling itself to become a global hub for cryptocurrencies and digital assets.
Coin Market Cap explained that the minting of an HKD-pegged stablecoin could give USD-pegged stablecoins a run for their money:
#CryptoNews: #Crypto and blockchain advocates have authored a report calling for the Hong Kong government to issue a #stablecoin pegged to the region’s dollar, which could challenge the dominance of #Tether and #USD Coin. 🇭🇰
— CoinMarketCap (@CoinMarketCap) July 5, 2023
Sky Guo explained: “Hong Kong has over 400 billion USD reserve, according to the HKMA. That is 5 times more than USDT, which reserve is still a question. Don’t underestimate the power of the e-HKD stablecoin.”
Hong Kong has over 400 billion USD reserve, according to the HKMA. That is 5 times more than USDT, which reserve is still a question. Don’t underestimate the power of the e-HKD stablecoin.
— Sky (@skyguoCypherium) July 2, 2023
The Block outlined some potential risks associated with an HKD stablecoin:
The proposal did acknowledge potential risks, such as legal and regulatory challenges, technical risks and short-term exchange rate fluctuations, but argues that the risks borne by government-issued HKDG were lower than those of stablecoins issued by private institutions.
Nischal Shetty offered his opinion: “This might be an interesting opportunity for many nations to experiment. CBDC would require a lot of regulatory and technology efforts, but a stablecoin is easier to implement. A stablecoin can be viewed as a precursor to a CBDC.”
This might be an interesting opportunity for many nations to experiment.
CBDC would require a lot of regulatory and technology efforts but a stablecoin is easier to implement.
A stablecoin can be viewed as a precursor to a CBDC. https://t.co/lpEcxGybFQ
— Nischal (Shardeum) 🔼 (@NischalShetty) July 4, 2023
Veteran trader Michaël Van De Poppe pointed out related developments in Hong Kong that are poised to make the special administrative zone a hub for digital assets.
De Poppe writes: “Hong Kong is the hub in Asia, as the biggest bank, HSBC, is now offering a Bitcoin ETF to customers. We’ve already had the news in the U.S., but Asia is following through. We’re at the start of the new bull cycle.”
Hong Kong is the hub in Asia, as the biggest bank, HSBC, is now offering a #Bitcoin ETF to customers.
We've already had the news in the U.S., but Asia is following through.
We're at the start of the new bull cycle.
— Michaël van de Poppe (@CryptoMichNL) June 26, 2023
Coin Telegraph provided background information on the authors of the proposal:
Wang Yang, vice president for institutional advancement at Hong Kong University of Science and Technology; Cai Wensheng, founder of smartphone software firm Meitu; Lei Zhibin, an honorary chair of the Hong Kong Blockchain Association; and doctoral student Wen Yizhou co-authored the paper.
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