Hong Kong chamber of commerce calls for yuan stablecoin issuance in budget suggestions

The HKGCC said in a statement on Tuesday that the business organization urges the government to consider allowing the issuance of yuan-linked stablecoins or stablecoins backed by a basket of various fiat currencies, including the yuan, Hong Kong dollar, or U.S. dollar.

The organization also called on the government to explore the possibility of a “Virtual Asset Connect Scheme,” initially with a daily limit of around HK$20 billion ($2.5 billion). The HKGCC did not provide further details on the scheme in its proposal.

The suggestions from the HKGCC come as the Financial Secretary is scheduled to deliver the budget address later this month. “A key focus of the submission is dedicated to retaining and attracting talent and businesses,” the HKGCC said in the statement. “This is crucial to enhance Hong Kong’s overall operating environment and ease the acute manpower shortages.”

In December, the Hong Kong Monetary Authority said in a joint consultation paper with the Financial Services and the Treasury Bureau that a stablecoin issuer would be required to obtain a license from the authorities “if it issues a stablecoin that references the value of one or more fiat currencies in Hong Kong.” The two-month consultation is set to end at the end of this month.

Christopher Hui, Secretary for Financial Services and the Treasury, wrote in a blog post last week that the HKMA plans to introduce a sandbox to explore stablecoin issuance with key industry players in the region.

Eddie Yue, chief executive of the HKMA, said in December that stablecoins could become the interface between traditional finance and the virtual 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,” Yue added.