Crypto and blockchain advocates have authored a report calling for the Hong Kong authorities to challenge a stablecoin pegged to the area’s greenback, which may problem the dominance of Tether and USD Coin.
In line with an English translation of a July 3 report provided by Chinese language crypto reporter Colin Wu, 4 people tied to monetary innovation proposed the federal government challenge an HKDG (Hong Kong Greenback Authorities) stablecoin to help its management efforts within the digital economic system. Wang Yang, vice chairman for institutional development at Hong Kong College of Science and Know-how; Cai Wensheng, founding father of smartphone software program agency Meitu; Lei Zhibin, an honorary chair of the Hong Kong Blockchain Affiliation; and doctoral pupil Wen Yizhou co-authored the paper.
“Issuing a stablecoin pegged to the Hong Kong greenback not solely helps to solidify Hong Kong’s management within the blockchain sector but additionally propels the progress of the digital Hong Kong greenback, enhancing transaction effectivity, lowering transaction prices, bettering present fee methods, and additional strengthening Hong Kong’s fintech capabilities,” stated the report. “Furthermore, the Hong Kong Greenback stablecoin can improve the effectivity and inclusiveness of Hong Kong’s monetary system; its stability, freedom of trade, excessive safety, openness, and cross-border liquidity can help a wider vary of economic improvements.”
A Proposal for Hong Kong to Challenge a Hong Kong Greenback Stablecoin to Compete with USDT/USDC
By Vice President of Hong Kong College of Science and Know-how and Chairman of Meitu
Learn extra: https://t.co/pCTxkqMLM7
— Wu Blockchain (@WuBlockchain) July 4, 2023
Yang, Wensheng, Zhibin, and Yizhou argued that the federal government’s plan of encouraging personal establishments to challenge stablecoins pegged to the Hong Kong greenback was “too conservative” in distinction to its intention of selling crypto and blockchain. The report claimed that Hong Kong’s overseas trade reserves as of March 2023 totaled roughly $430 billion, “considerably surpassing” the combined market capitalization of Tether (USDT) and USD Coin (USDC) at roughly $120 billion.
”HKDG backed by the SAR [special administrative region] authorities may have greater credibility and decrease threat, […] particularly because the credibility of USDT stays in query, and USDC has not too long ago skilled extreme reductions.”
Among the many advantages the report’s authors believed may come from the launch of HKDG included difficult the dominance of the US greenback, offering extra liquidity for presidency tasks and making it simpler for officers to observe and assess dangers. Nonetheless, the report cited potential dangers, together with authorized and regulatory challenges, worldwide disputes over transactions probably tied to illicit funding and hacks.
“The dangers borne by the government-issued HKDG are considerably decrease than these of the Hong Kong Greenback stablecoin issued by personal establishments,” stated the report.
In June, the federal government of Hong Kong introduced it had formed a task force to supervise the event of Web3. Greater than 80 companies concerned in digital belongings or blockchain reportedly considered establishing a presence within the SAR as of March, along with the roughly 800 fintech corporations already in Hong Kong.