Proposals For Hong Kong’s Virtual Asset Sector Growth And Stablecoin Regulation
The Hong Kong General Chamber of Commerce proposed the issuance of a stablecoin backed by the Chinese yuan, suggesting the local government consider issuing “RMB stablecoins or stablecoins backed by a basket of different currencies, including RMB, in addition to HKD or USD stablecoins.”
The HKGCC emphasized the potential for financial innovation and inclusion in the rapidly evolving virtual asset sector, stating that yuan-backed stablecoins would promote RMB adoption and facilitate international trade. They also recommended exploring a “Virtual Asset Connect Scheme” with a daily limit of approximately HK$20 billion ($2.5 billion) to encourage Mainland companies to use Hong Kong as a platform for global virtual asset trading, reinforcing the city’s position as an international financial hub.
Hong Kong has been examining stablecoin regulation, with the Hong Kong Monetary Authority and the Financial Services and the Treasury Bureau issuing a public consultation paper on proposals for a stablecoin regulatory regime in December 2023. According to HKMA chief executive Eddie Yue, stablecoins could bridge traditional finance with the virtual asset market. The stablecoin supply has recently been low, prompting speculation about potential upward trends in the market.
Clever Robot News Desk 8th February 2024