USDT and USDC. Hong Kong authorities called for the release of a stablecoin - a competitor to USDT
The Hong Kong authorities have been asked to launch their own HKDG stablecoin, backed by the jurisdiction's foreign exchange reserves, to compete with market giants USDT and USDC.
This is reported by The Block with reference to an appeal addressed to the authorities of the Special Administrative Region of China, among the authors of which is the Vice-Chancellor of the Hong Kong University of Science and Technology, Chief Scientific Advisor of the Hong Kong Web3.0 Association Wang Yang.
The paper highlights the need for a stablecoin as a link between traditional finance and the digital economy. The authors of the initiative believe that an asset pegged to the local currency will provide many benefits: it will expand financial inclusion, increase the efficiency of transactions, reduce transfer costs, and improve the performance of local payment systems.
The proposal clarifies that Hong Kong's foreign exchange reserves (approximately $430 billion as of March 2023) exceed the combined capitalization of USDT ($83.3 billion) and USDC ($27.7 billion). In this situation, the authors of the idea are sure that the HKDG stablecoin backed by the government will provide a higher level of trust and less risk.
According to the authors of the initiative, HKDG will benefit from government regulation and transaction transparency, which are provided by blockchain technologies. They are also confident that the stablecoin will help Hong Kong move towards de-dollarization and challenge the dominance of the US dollar in the crypto ecosystem.
At the end of May, the Chinese police detained the team of the Trust Reserve company, the developers of the CNHC and HKDC stablecoins, PANews reports. Employees of the company stopped communicating on May 29, later there was information that they were detained, their families were notified by the police.
Trust Reserve (former CNHC Group) issued the CNHC stablecoin, pegged to the offshore yuan (CNH), and the HKDC stablecoin, pegged to the Hong Kong dollar.
