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Hong Kong lawmaker says e-HKD has potential to be a stablecoin

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Hong Kong should make efforts to encourage the establishment of virtual assets rating agencies, and consider developing the e-HKD, the city’s central bank digital currency (CBDC) in the works, into a stablecoin, a Hong Kong lawmaker said in a recent media interview.

See related article: Hong Kong financial service providers gear up for retail crypto traders

Fast facts

  • Johnny Ng, a member of Hong Kong’s Legislative Council and a member of China’s advisory body, the Chinese People’s Political Consultative Conference, said in a Chinese media interview published Wednesday that a stablecoin-inspired CBDC could address the risks of Web 3.0 and virtual assets.
  • “The stablecoins on the market now are issued by private companies and are not subject to government regulation, and many worry about related risks,” Ng said, adding that Hong Kong could consider connecting e-HKD issuance with decentralized finance (DeFi).
  • Last month, the Legislative Council of Hong Kong passed an amendment to the bill that includes a licensing regime for virtual asset service providers, which will come into effect on June 1.
  • Financial services providers in Hong Kong, including brokers and fund managers, are seeking advice in anticipation of the new regulatory regime that will allow them to serve retail traders.
  • The Hong Kong Monetary Authority, the city’s de-facto central bank, said in September that the e-HKD wholesale system development can take up to three years. 

See related article: Hong Kong Stock Exchange debuts ‘Asia’s first’ crypto futures ETFs

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