Hong Kong authorities are looking for new designs for a central bank digital currency (CDBC), now proposing to issue a CBDC in the form of a stablecoin backed by the government.
Wu Jiezhuang, a member of the Legislative Council of the Hong Kong Special Administrative Region, believes that turning the Hong Kong digital dollar (e-HKD) into a stablecoin would provide benefits for the adoption of new technologies like Web3.
The option of developing e-HKD into a stablecoin has the potential to address the risks associated with virtual assets in Web3 effectively, Wu Jiezhuang said in an interview with China Blockchain News on Jan. 5. According to the lawmaker, such a design of the Hong Kong digital dollar would help authorities gain investors’ trust in the Web3 industry and better protect users from issues like hacks.
“The stablecoins that are currently available in the market are all issued by some private companies and are not subject to government supervision,” Wu Jiezhuang said, referring to failures of several stablecoin projects in 2022, which caused a domino effect on the crypto market.