The Hong Kong Financial Services and the Treasury Bureau (Treasury Bureau) and the Hong Kong Monetary Authority (HKMA) jointly issued a consultation conclusion on July 17 on the legislative proposals for the implementation of a regulatory system for fiat currency stablecoin issuers in Hong Kong. And on July 18, the list of participants of the stablecoin issuer's sandbox was announced, including: JD Coin Chain Technology (Hong Kong) Co., Ltd.; Yuancoin Innovation Technology Co., Ltd.; and Standard Chartered Bank (Hong Kong) Co., Ltd., Ansu Group Ltd., Hong Kong Telecommunications (HKT) Limited.

Wang Yang, chief scientific advisor of the Hong Kong Web3.0 Association, angel investor Cai Wensheng, Lei Zhibin, founder of Block City Web3.0 Technology Company, and Wen Yizhou, a doctoral student at the Hong Kong University of Science and Technology, published policy recommendations in Ta Kung Pao, proposing that Hong Kong issue foreign exchange Reserve-backed Hong Kong dollar stablecoin.

The article stated that stablecoins, a tool that plays a bridge role between traditional finance and the digital economy, have become an important issue in Hong Kong's promotion of the development of digital assets. Stablecoins play a role that cannot be ignored in the digital financial ecosystem.

Hong Kong's issuance of its own currency's stablecoin will not only help consolidate Hong Kong's blockchain leadership, but also promote the progress of the digital Hong Kong dollar, improve transaction efficiency, reduce transaction costs, improve the current payment system, and further strengthen Hong Kong's financial technology strength.

At the same time, the Hong Kong dollar stable currency can improve the efficiency and inclusiveness of Hong Kong's financial system. Its stability, free convertibility, high security, high openness and cross-border liquidity can provide support for a wider range of financial innovation. The launch of the Hong Kong dollar stable currency will undoubtedly inject new impetus into Hong Kong's economy and help enhance Hong Kong's competitiveness in the digital economy era.

The article "strongly calls on" the SAR government to issue a Hong Kong dollar stable currency (hereinafter referred to as HKDG, where G represents the government) backed by Hong Kong's foreign exchange reserves.

The Hong Kong dollar stablecoin endorsed by the government will have double guarantees: first, it will benefit from government supervision; second, it will benefit from the information transparency and non-tamperability brought by the blockchain contract.

They believe that the SAR government’s current plan is limited to allowing and encouraging private institutions to issue Hong Kong dollar stablecoins. In our opinion, this measure is too conservative and cannot be coordinated with the SAR government’s large-scale plan to promote digital assets and digital economy.