Hong Kong will assess the risks and study Beijing’s monetary policies before launching yuan-pegged stablecoins to bolster the internationalisation of the Chinese currency, according to a local senior official.
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Christopher Hui Ching-yu, Secretary for Financial Services and the Treasury, said during a panel on Wednesday at the Lujiazui Forum in Shanghai that while Hong Kong was technically ready to proceed, more time was needed to evaluate the advantages and disadvantages of issuing such a cryptocurrency.
“The risks and monetary policy directions must be studied, as there will be both benefits and drawbacks to issuing a linked stablecoin,” he said. “We need to align our considerations with national policymaking and [Beijing’s] road map [for yuan internationalisation].”
Last month, Hong Kong passed new legislation requiring issuers of stablecoins – digital tokens pegged to a reference asset like a fiat currency – to be licensed by the Hong Kong Monetary Authority (HKMA). The law is set to take effect on August 1.
During the opening session of the Lujiazui Forum on Wednesday, China’s central bank governor Pan Gongsheng said digital currencies, including stablecoins, were reshaping traditional payment systems and significantly shortening cross-border payment chains, while also presenting “significant challenges to financial regulation”.
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