12. Hong Kong Market Stablecoins:

1) Purpose

a. Cross-border settlement; b. Interbank settlement; c. Facilitating the purchase of USD assets.

2) Issues:

Hong Kong lacks high-quality public blockchains in the entire industry chain. Additionally, there is insufficient global demand for HKD stablecoins.

3) Operations:

Users: HK users can use licensed exchanges (HashKey/OSL) to convert HKD into USDT/USDC and then trade assets like BTC to reduce exchange rate losses.

Users can use stablecoins from different issuers for cross-border payments, which may eventually integrate with platforms like WeChat Pay and Alipay.

Issuers: Regulated by licenses: a. Deposit HKD 25 million as collateral; b. Only operate 1:1 HKD-backed models; c. Algorithmic stablecoins are prohibited.

Currently, only three issuers are approved: a. JD.com’s blockchain; b. RD Technologies; c. Standard Chartered. A sandbox mechanism is also established, allowing unlicensed institutions to participate in testing to foster innovation.

4) Application Scenarios:

a. Commercial Payments: Nigerian merchants can use HKD stablecoins for cross-border trade settlements, promoting HKD internationalization while avoiding local currency volatility risks.

b. After the HKD is pegged to the USD, due to the USD’s vast wealth management market (including U.S. bonds and stocks), users can indirectly invest in stocks via USD stablecoins.

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