Fang Hongjin, co-chairman of the Hong Kong Blockchain Association, said in a recent statement that he disagrees with the Hong Kong government’s proposal to issue a Hong Kong dollar stablecoin backed by foreign exchange reserves.
Fang Hongjin questioned in the article whether the Hong Kong government needs to use foreign exchange reserves as collateral for the issuance of stable coins if it plans to launch a digital Hong Kong dollar. He believes that the Hong Kong government, as the issuer of the fiat Hong Kong dollar, should not create derivative products with its own fiat currency as collateral, as this would lead to confusion and practical difficulties.
Fang Hongjin emphasized that the Hong Kong government should not be the entity responsible for issuing Hong Kong dollar stablecoins. Instead, he suggested that private institutions should issue stablecoins under the supervision and supervision of the Hong Kong government. He believes it is wiser for private entities to take on this responsibility, as they can more effectively deal with the complexities of stablecoin issuance.
In addition, Fang Hongjin expressed concern about the influx of cryptocurrency projects that do not meet US regulatory requirements into Hong Kong seeking asylum. He believes that these projects are likely to fail to meet Hong Kong’s existing and upcoming financial regulations.
The issuance of stablecoins has been a topic of intense debate and exploration within the blockchain and cryptocurrency community. Stablecoins are designed to provide stability in volatile cryptocurrency markets by pegging their value to fiat currencies or other assets.
While they offer advantages such as faster transactions and borderless payments, concerns about their regulatory oversight and potential risks have sparked discussion among policymakers and industry experts.
As an important voice for the blockchain industry, the Hong Kong Blockchain Association plays a vital role in shaping the development and adoption of blockchain technology in Hong Kong. The association actively engages with policymakers, regulators and industry stakeholders to promote responsible blockchain innovation and advocate for enabling regulatory frameworks.
