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  • Writer's picturemicropapa68

Crypto Advocates Propose HKDG Stablecoin in Hong Kong

Cryptocurrency and blockchain advocates in Hong Kong have proposed that the Hong Kong government issue the HKDG stablecoin to compete with Tether and USD Coin. The stablecoin aims to strengthen Hong Kong's leadership in the blockchain field, improve the digital Hong Kong dollar, increase transaction efficiency, reduce costs, enhance fintech capabilities, and support financial innovation. It is believed that the HKDG stablecoin can provide stability, free transactions, high security, openness and cross-border liquidity to improve the efficiency and inclusiveness of Hong Kong's financial system.

A report by Yang Wensheng, Chen Zhibin and Yi Zhou argues that the government's plan to encourage private institutions to issue stablecoins is too conservative. They suggested issuing a government-backed HKDG stablecoin, emphasizing its higher credibility and lower risk compared to USDT and USDC. The author believes that the HKDG stablecoin can challenge the dominance of the U.S. dollar, provide liquidity for government projects, and help with risk assessment. However, they are also aware of potential legal, regulatory and security risks.

Academic and industry players in Hong Kong have proposed that the government issue a Hong Kong dollar-backed digital currency (HKDG) to compete with US dollar stablecoins and reduce reliance on the US dollar in the digital asset industry. The HKDG stablecoin aims to improve liquidity, efficiency and financial inclusion while combining blockchain transparency with government regulation. Hong Kong’s Securities and Futures Commission is working on regulations for stablecoins. However, local banks in Hong Kong such as HSBC and Standard Chartered have previously been fined for illegal activities and refused to provide services to cryptocurrency companies. This reluctance has led to challenges for executives in managing legal risk and maintaining a good image. Political tensions between East and West and China's exploration of the yuan as a potential dollar alternative further complicates the situation. Hong Kong’s Securities and Futures Commission has asked banks about their hesitancy to work with the cryptocurrency industry, which is holding back institutional-level cryptocurrency adoption.

Hong Kong has received proposals to issue its own stablecoin HKDG backed by foreign exchange reserves to compete with established stablecoins such as USDT and USDC. The proposal aims to strengthen Hong Kong's position in the blockchain industry, promote a digital Hong Kong dollar, improve transaction efficiency, reduce costs, upgrade payment systems and enhance fintech capabilities. The introduction of the HKDG stablecoin could improve the efficiency and inclusiveness of Hong Kong's financial system, challenge the US dollar's dominance in the cryptocurrency ecosystem, and contribute to de-dollarization efforts. Hong Kong’s move to establish a Web3 development working group demonstrates its commitment to becoming a global cryptocurrency hub and fostering a strong ecosystem in the region.

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