- This is the call made by four major financial and Web3 experts
- They believe the government stands a good chance of creating an inclusive ecosystem attractive for investment
- Such a coin could also compete with USDT and USDC
- But authorities seem to see e-HKD primarily as a CBDC rather than a stabelcoin
A public appeal to the Hong Kong authorities appeared online yesterday, July 4. In it, an advisor to the local Web3 association made a proposal to issue a stabelcoin tied to the local currency. According to experts, this will strengthen Hong Kong’s economy and support its ambitions in the cryptocurrency market.</nbsp;
The original letter can be found here.. His English translation was provided by journalist Colin Wu. Wang Yang (advisor to the Hong Kong Web3 Association), Cai Wensheng (founder of Meitu), Lei Zhibin (founder of BlockCity), and Wen Yizhou (doctoral student at Hong Kong University of Science and Technology) signed the appeal.
Reminder, HKDG (Hong Kong Digital Dollar) is expected to compete with USDT and USDC, the two largest stablcoins in the market. This is how the co-authors commented on their statement:
“The release of a stable fiat-linked coin will not only help strengthen Hong Kong’s blockchain leadership, but will also help HKD progress by making transactions cheaper and faster.”
The co-authors also cited some other long-term benefits. They believe the introduction of such an instrument would attract additional investment, making Hong Kong’s financial system inclusive.
The government’s plan to maintain “private” stablcoins has been called too conservative here.. Hongkong reserves are about $430 billion, significantly more than the gross market capitalization of the USDC and USDT. So why not take advantage of the opportunity?
While this idea does have some risks.. These are legal problems, potential cyberattacks, disputes over different regulatory rules in different jurisdictions. But according to the authors of the appeal, the advantages outweigh the disadvantages.
In the past few months, Hong Kong has conducted several initiatives aimed at integrating cryptocurrencies. In particular, the licensing regime for service providers. The authorities have also set up a task force to develop and implement new blockchain developments.
What is the authorities’ position?
Late Colin Wu published an interview with OSL’s Hu Zhenbang. Among other things, they discussed the possibility of issuing a digital Hong Kong dollar.
Zhenbang said he doubted the idea of a state-owned steiblocoin. In his opinion, this poses certain regulatory problems.
He believes it is more likely that China will release a digital equivalent of the fiat, based on the e-CNY model.. CBDC is a more regulated, transparent and reliable tool. The authorities are unlikely to agree to a too bold experiment with stable coin.
Anyhowever, the appeal has not yet had any comment in Hong Kong’s political circles.. Stay tuned for updates on this topic.