Hong Kong Plans to Issue a Stablecoin to Compete with USDT and USDC

Wang Yang — Vice Chancellor of the Hong Kong University of Science and Technology and Chief Scientific Advisor of the Hong Kong web3 Association — angel investor Cai Wensheng, BlockCity founder Lei Zhibin and Ph.D. student Wen Yizhou have penned a new policy proposal, emphasizing the benefits of a Hong Kong Dollar-backed stablecoin (HKDG), to be issued by the government.

Wu Blockchain first reported the news. Arguing that the current plan of allowing private institutions to issue stablecoins is insufficient, the experts see HKDG as a competitive advantage to existing stablecoins, such as USDT and USDC, as it would be backed by the Hong Kong government’s $430 billion foreign exchange reserves.

Noting its potential for enhanced financial inclusiveness, efficiency, cost reduction, improved payment systems and stronger fintech capabilities, they point to Singapore’s $6.6 million XSGD stablecoin — dwarfed by the $110 billion of USDT and USDC combined — as an example of what is currently missing in the market.