The Hong Kong General Chamber of Commerce Proposes Yuan-Linked Stablecoins
The Hong Kong General Chamber of Commerce (HKGCC) has submitted proposals for the upcoming budget, recommending that the government allows the issuance of Chinese yuan-linked stablecoins. In a statement, the HKGCC urged policymakers to consider the issuance of stablecoins backed by a basket of fiat currencies, including the yuan, Hong Kong dollar, or U.S. dollar. The organization also called for the exploration of a “Virtual Asset Connect Scheme” with a daily limit of around HK$20 billion ($2.5 billion), without providing further details.
Focusing on Talent and Businesses
The HKGCC’s suggestions align with their goal of retaining and attracting talent and businesses in Hong Kong. They believe this is crucial for enhancing the city’s operating environment and addressing manpower shortages. The proposals come ahead of the Financial Secretary’s budget address later this month.
Regulatory Developments in Hong Kong
In December, the Hong Kong Monetary Authority (HKMA) released a consultation paper stating that stablecoin issuers would require a license if their stablecoin references one or more fiat currencies in Hong Kong. The consultation period ends this month. Secretary for Financial Services and the Treasury, Christopher Hui, revealed that the HKMA plans to introduce a sandbox to explore stablecoin issuance with industry players in the region.
The Potential of Stablecoins
Eddie Yue, Chief Executive of the HKMA, believes stablecoins could serve as an interface between traditional finance and the virtual asset market. He emphasized that if stablecoins become widely used by the general public, their stability becomes even more important for integration into the digital payment ecosystem and real economy.
Hot Take: Embracing Stablecoins for Economic Growth
The Hong Kong General Chamber of Commerce has proposed the issuance of Chinese yuan-linked stablecoins and stablecoins backed by a basket of fiat currencies in the upcoming budget. By allowing these digital assets, Hong Kong aims to enhance its operating environment, attract talent and businesses, and address manpower shortages. The government’s exploration of a “Virtual Asset Connect Scheme” further demonstrates their commitment to embracing innovative financial solutions. With regulatory developments in progress and plans for a stablecoin sandbox, Hong Kong is positioning itself as a hub for stablecoin issuance and bridging traditional finance with the virtual asset market.
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