Hong Kong central bank looking to regulate crypto assets and stablecoins

 

The Hong Kong Monetary Authority (HKMA) has advised that stablecoins could undermine the Hong Kong bone in a lately released discussion paper about its retail central bank digital currency,e-HKD.

Numerous in the crypto assiduity believe that interest in developing central bank digital currencies (CBDC) has been in response to the rise of private-sector stablecoins. This discussion paper appears to confirm that view.

“ With continued developments in stablecoins, it can not be ruled out that a popular stablecoin may ultimately crop,” wrote the HKMA as part of the “e-HKD A Policy and Design Perspective” discussion paper released on Wednesday In a script where the use of these stablecoins becomes wide (…) the part of the domestic currency as the single unit of account could be undermined.

The authority also stressed the pitfalls that similar stablecoins could undermine payment integrity due to functional or fiscal failures or allow for lesser ease of capital flight during a fiscal extremity period, which would undermine the control of central banks over the original frugality.

The HKMA first blazoned its plans to study a retail-focused central bank digital currency in June 2021 as part of its “ Fintec 2025” strategy. Still, the authority has also been studying to graces of issuing a noncommercial CBDC since 2017.

Retail CBDCs (rCBDCs) are targeted toward the general public and used for everyday deals. Noncommercial CBDCs are issued only to financial institutions and are aimed at making their deals briskly, less precious, and more secure.

The financial authority has not committed to introducing a digital currency. The most recent discussion paper simply invited assiduity leaders and consumers to give fresh feedback on the implicit challenges and benefits of the proposed rCBDC.

It also asks for feedback on certain design considerations similar to an applicable rCBDC allocation medium, interoperability across large-value and retail payment systems, sequestration and data protection, legal considerations, private sector participation, and implicit use cases.

Across the border in landmass China, the central bank's digital currency continues to pick up brume. Before this month, the People’s Bank of China (PBOC) said it'll be expanding its digital yuan trial to six further metropolises, adding to the being 10 major airman metropolises formerly witnessing trials.

Meanwhile, the Philippines government on Wednesday blazoned that it'll be pursuing its airman design for a non-commercial central bank digital currency, called Project CBDCPh, which it envisions will be used forcross-border payments, equity securities payments, and intraday liquidity installations (ILF).