Hong Kong General Chamber Of Commerce Urges Government To Consider Yuan-Linked Stablecoin

Updated: 07 February 2024

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The Hong Kong General Chamber of Commerce (HGCC) submitted proposals for the city’s upcoming budget, asking policymakers to allow the issuance of a stablecoin in China’s yuan.

It said in a Feb. 6 statement that the stablecoin could be be backed by the yuan or a basket of various fiat currencies, including the yuan, Hong Kong dollar and USD stablecoins.

Hong Kong chamber of commerce calls for yuan stablecoin issuance in budget suggestions pic.twitter.com/j53XZJbqU9

— TCM Crypto Club (@tcmcryptoclub) February 7, 2024

The organization also called on the government to explore the viability of a “Virtual Asset Connect Scheme,” which will initially have a daily limit of approximately HK$20 billion. No further details regarding the proposed scheme were provided in the HKGCC’s statement.

Hong Kong Central Bank To Explore Stablecoin Issuance

The Hong Kong Monetary Authority (HKMA), the city’s central bank, plans to introduce a sandbox to explore stablecoin issuance with key players in the region, said Secretary for Financial Services and the Treasury Christopher Hui in a blog post last week.

The chief executive of the HKMA, Eddie Yue, said in December that stablecoins could become the interface between traditional finance and the digital asset market.

“In a scenario where stablecoins become one of the preferred payment options by the general public, we should reasonably expect further integration between the digital payment ecosystem and the real economy, and whether the stablecoin is indeed ‘stable’ will then become ever more important,” he said.

In December, the HKMA said in a paper that any stablecoin issuer would need to obtain a license from authorities. The paper was a joint consultation document between the HKMA and the Financial Services and Treasury Bureau. This consultation period is scheduled to terminate at the end of this month.

The city’s financial secretary is scheduled to deliver the budget address in the next couple of weeks.