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In keeping with TKWW, key figures together with HKUST Vice-President counsel that the Hong Kong authorities ought to challenge its personal stablecoin, known as HKDG, as a strategic transfer to bolster town’s digital financial system.
Hong Kong SAR authorities’s ongoing promotion and acceptance of digital belongings positions it forward of nations or areas such because the U.S and Singapore. On this context, stablecoins, bridging the hole between conventional finance and the digital financial system, have gotten more and more necessary. Issuing a stablecoin linked to the Hong Kong greenback may considerably improve transaction effectivity, cut back prices, and strengthen the area’s fintech capabilities.
Nevertheless, the federal government’s present stance of encouraging personal establishments to challenge Hong Kong greenback stablecoins is seen as too conservative by trade insiders. This technique may result in stablecoins with marginal market impression, a priority underscored by the instance of Singapore’s XSGD.
The consultants argue {that a} Hong Kong greenback stablecoin, supported by town’s overseas alternate reserves and authorities rules, may present a double assure of security. Such a stablecoin, HKDG, may pose a problem to dominant stablecoins like USDT and USDC, which at the moment maintain market capitalizations of $830 billion and $280 billion, respectively. Given Hong Kong’s overseas alternate reserves of $430 billion, a government-backed HKDG presents higher credibility and decrease danger.
The proposed HKDG may additionally signify a major step in direction of de-dollarization. Whereas it won’t singlehandedly disrupt the dominance of the US greenback, it may problem its supremacy inside the digital asset ecosystem. The profitable implementation of HKDG may encourage different sovereign currencies to observe go well with, selling diversification within the world monetary market.
In essence, the decision for a government-backed stablecoin like HKDG underscores each the potential and urgency for Hong Kong to determine a extra commanding presence within the quickly rising digital financial system.
This proposition is co-authored by Wang Yang, Vice President and Chief Science Advisor of the Hong Kong College of Science and Expertise and the Hong Kong Web3.0 Affiliation, alongside famend angel investor Wensheng Cai, Web3.0 Tech firm founder Zhibin Lei, and doctoral pupil Yizhou Wen from the Hong Kong College of Science and Expertise. Collectively, they’re advocating for a major shift in technique.
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