Hong Hao: The Scale of Stablecoins Will Soon Exceed One Trillion Dollars

According to a report by Jinse Finance, renowned economist Hong Hao recently shared his latest views in an online discussion on the topic "Stablecoins: Just a Fad or a True Game Changer?" Hong Hao believes that most stablecoins issued in Hong Kong will be pegged to the Hong Kong dollar rather than U.S. Treasury bonds. In addition, the Hong Kong Monetary Authority holds a very large amount of foreign exchange reserves, so stablecoins from Hong Kong may be even more stable than those from the United States. He also noted that the current stablecoin market is still very small, with a total value of only $250 billion. He expects that as more participants enter the market, this figure will soon exceed $1 trillion. Theoretically, the issuance of stablecoins does increase demand for U.S. Treasuries, since there are now multiple market participants issuing stablecoins backed by U.S. Treasuries. Hong Hao predicts that in the future, the real demand for U.S. Treasuries will depend on the fiscal stability of the U.S. government. Additionally, he pointed out that stablecoins are one of the better ways to address the cost and speed issues of cross-border transactions, making it easier for foreign participants to trade with China. However, for Chinese regulators, stablecoins also mean the decentralization of payment systems, which could pose challenges to the existing regulatory framework. Nevertheless, he said, "The stablecoin boom has already begun, and the role of stablecoin technology in daily life will become increasingly prominent—this is a trend."