Economist Huang Yiping floats Hong Kong as stablecoin staging ground

South China Morning Post

8 hours ago

Issuing a stablecoin pegged to the offshore yuan in Hong Kong may be more feasible than in mainland China due to the latter's capital controls, a central bank adviser has said.
The comments from Huang Yiping, also dean of Peking University's National School of Development, came as worries arise in Beijing's policy circles that Washington could gain an upper hand through the cryptocurrency offshoot as a means of consolidating US dollar dominance.
'As China's capital account is not fully liberalised, it would be very difficult to roll out a stablecoin domestically,' he told financial news outlet Yicai.com on Wednesday.
Huang, an influential figure in his second stint at the People's Bank of China's monetary policy committee, acknowledged Hong Kong's speedy progress in this area.
The special administrative region – often a staging ground for financial experimentation – has taken a more permissive stance than the mainland. In late May, the city
passed a law establishing a regulatory framework for stablecoins that is set to take effect on August 1.
Although stablecoins can be pegged to any fiat currency,
more than 99 per cent are currently backed by the US dollar or US dollar-denominated assets – far exceeding the US dollar's roughly 50 per cent share in global payments and its 58 per cent share of global foreign exchange reserves.
'The issue with issuing a stablecoin in Hong Kong is that if it's pegged to the Hong Kong dollar, which in turn is pegged to the US dollar - so ultimately, it's the US dollar that plays the foundational role,' Huang said.