The Hong Kong General Chamber of Commerce Proposes Yuan-Backed Stablecoin
The Hong Kong General Chamber of Commerce (HKGCC) has suggested the issuance of a stablecoin backed by the Chinese yuan in its proposals for the local government’s upcoming budget address. The HKGCC believes that the rapid evolution of the virtual asset sector presents opportunities for financial innovation and inclusion. It argues that the issuance of yuan-backed stablecoins would promote the broader adoption of the yuan and facilitate international trade transactions.
Creating a Virtual Asset Connect Scheme
In addition to stablecoins, the HKGCC recommends that the government explore the creation of a “Virtual Asset Connect Scheme.” This scheme would allow Mainland companies to use Hong Kong as a platform for conducting virtual asset trading with global counterparts. The organization believes that this scheme would foster the growth of the virtual asset industry and reinforce Hong Kong’s position as an international financial hub.
Hong Kong’s Exploration of Stablecoin Regulation
Hong Kong has been actively exploring stablecoin regulation. In December 2023, the Hong Kong Monetary Authority, Financial Services and the Treasury Bureau issued a public consultation paper on proposals for a stablecoin regulatory regime. HKMA chief executive Eddie Yue stated that while the virtual asset market is still developing, stablecoins could serve as a bridge between traditional finance and the virtual asset market.
Hot Take: HKGCC Proposes Yuan-Backed Stablecoin to Foster Financial Innovation
The Hong Kong General Chamber of Commerce has recommended issuing a stablecoin backed by the Chinese yuan in order to promote wider adoption of the currency and facilitate international trade transactions. In addition, they propose creating a Virtual Asset Connect Scheme to encourage virtual asset trading between Mainland companies and global counterparts, strengthening Hong Kong’s position as an international financial hub. This proposal aligns with Hong Kong’s ongoing exploration of stablecoin regulation, recognizing the potential for stablecoins to bridge the gap between traditional finance and the virtual asset market.
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