Hong Kong Exploring Possibility of Issuing a Stablecoin Pegged to the Yuan

The Hong Kong Chamber of Commerce has suggested creating a stablecoin that would be backed by the Chinese yuan, which would benefit companies engaging with mainland China and other Asian nations.

Hong Kong is facing competition from Singapore and London in becoming a hub for blockchain industry development.

In April 2023, Hong Kong’s government urged the banking industry to support crypto companies. Removing limitations on interactions with businesses focused on the digital currency market would pave the way for the industry’s growth in the region.

The HKGCC proposes including the launch of a stablecoin in Hong Kong’s budget program, with plans to also include the Hong Kong dollar and US dollar. While the city’s authorities are not opposed to the idea, they suggest consulting with experts and blockchain companies first.

This project has received support from the head of the Hong Kong Monetary Authority, Eddie Yue, who sees stablecoins as a way to bridge the gap between the crypto world and traditional finance.