A report was published asking the Hong Kong government to create a stablecoin based on the HK dollar.

Stablecoin Based on the Hong Kong Dollar to Compete USDT, USDC

  • A report was published asking the Hong Kong government to create a stablecoin based on the HK dollar.
  • The four co-authors tied to financial innovation want the HK dollar stablecoin to dethrone USDT and USDC.
  • The stablecoin will establish the SAR as a leader in the blockchain space and also advance the HK dollar.
  • The authors said that a stablecoin will enhance the efficiency and inclusiveness of the SAR’s financial system.

The stablecoin industry has been in an uncertain state since the collapse of TerraUST and the crackdown of United States’ regulators on Binance’s BUSD. Interestingly, crypto and Web3 advocates have presented a report asking the Hong Kong government to create a stablecoin based on the HK dollar to compete with the leading stablecoins Tether USD (USDT) and Circle’s USD Coin (USDC). 

A translation of the report provided by Chinese crypto journalist Colin Wu, also known as Wu Blockchain on social media platform Twitter, four people tied to financial innovation, have asked the Hong Kong government to create the HK dollar stablecoin and lead the digital asset industry. The special administrative region of China aims to create a blockchain and crypto hub within its boundaries, a policy quite different from that of mainland China.

The co-authors of the report include 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.

It is crucial to note that the report claims that “issuing a stablecoin pegged to the HK dollar not only helps to solidify Hong Kong’s leadership in the blockchain sector but also propels the progress of the digital Hong Kong dollar, enhancing transaction efficiency, reducing transaction costs, improving current payment systems, and further strengthening Hong Kong’s fintech capabilities,” while adding:

“Moreover, the Hong Kong Dollar stablecoin can enhance the efficiency and inclusiveness of Hong Kong’s financial system; its stability, freedom of exchange, high security, openness, and cross-border liquidity can support a wider range of financial innovations.”

The co-authors noted that the government’s plans to rely on private institutions to issue stablecoins are “too conservative” and also in contrast to its intention of promoting blockchain and crypto technology. They said that a stablecoin backed by the Hong Kong authorities will have “greater credibility and lower risk” during a time when the credibility of USDT remains in question while “USDC has recently experienced severe discounts.”

As reported earlier by BitcoinWisdom, the special administrative region of China has created a Task Force that will be responsible for the development of Web3 in the region. The Task Force will be chaired by Financial Secretary Paul Chan and will include 15 non-official members from the industry along with 11 key government officials.

Parth Dubey Verified

A crypto journalist with over 3 years of experience in DeFi, NFT, metaverse, etc. Parth has worked with major media outlets in the crypto and finance world and has gained experience and expertise in crypto culture after surviving bear and bull markets over the years.

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