A new policy proposal urges the Hong Kong government to issue a stablecoin pegged to the Hong Kong dollar to compete with USDT and USDC.
A government-backed stablecoin would reduce costs, improve payment systems, aid de-dollarization and strengthen Hong Kong’s fintech capabilities, the document claims.Connect/Create WalletNo wallet? No problem. You can set one up for free. We recommend Torus for first-time users.A new policy proposal encourages the Hong Kong government to issue its own stablecoin, HKDG, backed by its foreign exchange reserves — in order to compete with existing stablecoins such as USDT and USDC.
The experts argue that the government’s current plan, allowing private institutions to issue stablecoins, is not ambitious enough and may result in limited market share. They say it draws a parallel between Singapore’s XSGD stablecoin issued by Xfers with a market cap of $6.6 million, compared to more thanas of March — exceeding the combined market capitalization of USDT and USDC, an HKDG stablecoin backed by the government would offer higher credibility and lower risk, the proposal said.
HKDG would benefit from government regulation and the transparency provided by blockchain technology, the authors said. Additionally, the paper argued HKDG would help Hong Kong to take a substantial step toward de-dollarization and challenge the dominance of the U.S. Dollar in the crypto ecosystem. The experts claimed it could also provide additional liquidity for government investment projects, facilitate the digitization of traditional assets, promote financial innovation and competitiveness and increase transparency.
Hong Kong has recently signaled its desire to reestablish itself as a global hub for the crypto industry, setting up a© 2023 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
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