Hong Kong is preparing to launch a stablecoin pegged to the Chinese Yuan!

The Hong Kong General Chamber of Commerce (HKGCC) has submitted proposals to the local government for the upcoming budget, asking for the issuance of stablecoins pegged to the Chinese Yuan.

Hong Kong Chamber of Commerce Defends Yuan Stablecoin Issuance

In a published statement, the HKGCC urged the government to consider allowing the issuance of stablecoins linked to the Yuan or backed by a basket of various fiat currencies, including the Yuan, the Hong Kong dollar or the US dollar.

The organization also suggested exploring a “Virtual Asset Linkage Program” with an initial daily limit of around 20 billion Hong Kong dollars ($2.5 billion).

In December, the Hong Kong Monetary Authority (HKMA), in a joint consultation paper with the Bureau of Financial Services and Treasury, stated that a stablecoin issuer would need to obtain a license from the authorities if it issues a stablecoin that refers to the value of one or more fiat currencies in Hong Kong. The two-month consultation is scheduled to be completed by the end of this month.

HKMA Chief Executive Eddie Yue said in December that stablecoins could become an interface between traditional finance and the virtual asset market.

“In a scenario where stablecoins become one of the preferred payment options by the general public, we should expect greater integration between the digital payment ecosystem and the real economy, and whether stablecoins are truly stable will become even more important later,” Yue added.

It is not investment advice.