Hong Kong General Chamber of Commerce Calls for Yuan-Linked Stablecoins
The Hong Kong General Chamber of Commerce (HKGCC) has urged policymakers to consider permitting the issuance of Chinese yuan-linked stablecoins. In a statement released on Tuesday, the influential business organization emphasized the importance of attracting and retaining talent and businesses in Hong Kong. They proposed exploring a “Virtual Asset Connect Scheme” that would allow the issuance of stablecoins backed by a basket of fiat currencies, including the yuan, Hong Kong dollar, or U.S. dollar. The HKGCC suggested an initial daily limit of approximately HK$20 billion ($2.5 billion) for this scheme.
Hong Kong’s Upcoming Budget
The recommendations from HKGCC come ahead of the Financial Secretary’s upcoming budget address later this month. Enhancing Hong Kong’s overall operating environment and addressing manpower shortages are key objectives highlighted by the organization.
In December, the Hong Kong Monetary Authority (HKMA) released a joint consultation paper indicating that stablecoin issuers would require licenses if their stablecoins referenced the value of one or more fiat currencies in Hong Kong. The consultation period for this paper is set to conclude at the end of the month.
Christopher Hui, the Secretary for Financial Services and the Treasury, plans to introduce a sandbox for exploring stablecoin issuance in collaboration with industry players in the region. Eddie Yue, Chief Executive of the HKMA, has also emphasized the importance of stablecoins in bridging traditional finance with the virtual asset market.
Hong Kong Expected to Approve Spot Bitcoin ETFs
Experts predict that Hong Kong will approve spot crypto exchange-traded funds (ETFs) by mid-2024. Several futures-based crypto ETFs are already listed in the city state. Additionally, Hong Kong will host The Bitcoin Conference this year, according to local lawmaker Johnny Ng.
Hot Take: Hong Kong Embracing Stablecoins and Crypto ETFs
The Hong Kong General Chamber of Commerce’s call for yuan-linked stablecoins and the expected approval of spot crypto ETFs highlight Hong Kong’s growing interest in embracing digital assets. By allowing stablecoin issuance and facilitating the development of crypto ETFs, Hong Kong aims to attract talent, businesses, and investment in the crypto sector. These initiatives demonstrate Hong Kong’s commitment to positioning itself as a global hub for digital finance. As regulations evolve and innovative solutions emerge, Hong Kong has the potential to become a significant player in the cryptocurrency market.
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