Hong Kong Eyes RMB-Backed Stablecoins for Next Step in Digital Growth

Key Points:

• David Chiu views stablecoins as a promising and expansive market for Hong Kong.
• Regulatory clarity is essential before Hong Kong proceeds with stablecoin initiatives, Chiu emphasized.
• Chiu is particularly interested in the potential of issuing RMB-backed stablecoins in Hong Kong.

Hong Kong shows growing interest in RMB-backed stablecoins as part of its digital asset push. David Chiu highlights the potential, describing the market as “huge”.

Hong Kong is showing increasing interest in RMB-backed stablecoins as part of its broader push into digital assets. David Chiu, a member of the Hong Kong Special Administrative Region’s Legislative Council for Technology and Innovation, recently highlighted the potential of stablecoins at the inauguration ceremony of the Hong Kong Compliance Industry Association, as per Foresight News.

Hong Kong’s Strategic Focus on RMB-Backed Stablecoins

Chiu expressed particular interest in the possibility of issuing RMB-based stablecoins in Hong Kong, describing the market as “huge.” He emphasized the need to wait for Hong Kong’s regulatory details before moving forward, indicating a cautious approach to this emerging financial technology.

The interest in RMB-backed stablecoins aligns with Hong Kong’s broader plans for comprehensive stablecoin regulations. In August, TokenInsight reported that Hong Kong is aiming to introduce a regulatory framework supported by sandbox testing through the Hong Kong Monetary Authority (HKMA).

Read more: Stripe Secures $1.1B Bridge Stablecoin Payment Push

HKMA’s Regulatory Framework for Stablecoins

According to CoinGeek, Hong Kong’s approach to stablecoin regulation is characterized by what Chiu calls an “agile and risk-based approach.” The city aims to integrate stablecoins into its financial system gradually, balancing innovation with regulatory control.

The HKMA has already taken steps in this direction, announcing the first participants in its stablecoin issuer sandbox on July 18. The participants include a company linked to a major Chinese e-commerce retailer, a local fintech firm, and a coalition of Standard Chartered Bank, Animoca Brands, and Hong Kong Telecommunications.