The Hong Kong General Chamber of Commerce has recommended the introduction of a stablecoin pegged to the Chinese yuan, proposing this initiative in conjunction with the implementation of a “Virtual Asset Connect Scheme.”
In a statement released alongside suggestions for the local government’s forthcoming budget address, the business advocacy organization urged the government to explore the creation of stablecoins backed by the Chinese yuan. They proposed the issuance of “RMB stablecoins or stablecoins backed by a basket of different currencies, including RMB, in addition to HKD or USD stablecoins.”
Emphasizing the opportunities for financial innovation within the “rapidly evolving virtual asset sector,” the HKGCC highlighted that yuan-backed stablecoins could play a pivotal role in “encouraging widespread adoption of RMB and streamlining international trade transactions.”
The HKGCC further recommended the government’s consideration of a “Virtual Asset Connect Scheme” with a daily limit of approximately HK$20 billion ($2.5 billion). According to the organization, this scheme would empower Mainland companies to utilize Hong Kong as a platform for global virtual asset trading, serving as an incentive to nurture the growth of the virtual asset industry and reinforcing Hong Kong’s status as an international financial hub.
As part of its ongoing efforts to regulate stablecoins, Hong Kong has been actively exploring regulatory frameworks. In December 2023, the Hong Kong Monetary Authority and the Financial Services and the Treasury Bureau jointly issued a public consultation paper outlining proposals for a stablecoin regulatory regime.
In a statement accompanying the release of the paper, HKMA chief executive Eddie Yue noted that although the virtual asset market is “still far from maturity,” stablecoins could potentially act as the “interface between traditional finance and the virtual asset market.”
The stablecoin supply has shown signs of lagging in recent months. Castle Island Ventures partner and co-founder Nic Carter remarked on Twitter (X) in late October that the low supply could be an early indication of an “Up Only” trend from this point forward.
