The authorities of Hong Kong are seeking new designs for CBDCs, Central Bank Digital Currency, as they are proposing to issue a CBDC in the form of a stablecoin, which will be backed by the government.

A member of the Legislative Council of the Hong Kong Special Administrative Region, Wu Jiezhuang, explains that replacing the digital dollar of Hong Kong, e-HKD into a stablecoin will help the country move in the direction of adopting new technologies such as Web3.

Wu Jiezhuang informed in an interview that converting Hong Kong Digital Dollar into stablecoin will eliminate the risks and issues related to virtual assets in the deployment of Web3. This turning of the digital dollar into stablecoin will help authorities and regulators, will also help investors to put trust in the Web3 industry, and will also protect users of Web3 from crypto hacks and frauds.

On the current failures of various crypto coins, Wu Jiezhuang said, “The stablecoins that are currently available in the market are all issued by some private companies and are not subject to government supervision.” He also claimed that this was the reason that created a domino effect in the crypto industry.

The regulators also claimed that in the future, stablecoins could be linked with decentralized finance (DeFi) for greater support and access in adopting a new Web3 ecosystem, he stated,  “The Hong Kong government can consider whether the issuance of digital Hong Kong dollars can be connected with decentralized finance and become an important infrastructure component of the virtual asset trading platform.”

Wu Jiezhuang is a legislative Council member of Hong Kong as well as a founding member of G-Rocket, which is a startup booster, the organization aims to tap the market of 1000 Web3 businesses to set up in the city-state in the near future. 

In Hong Kong, Wu Jiezhuang is the government official who has lately pointed out the foreseen benefits of the amalgamation of CBDCs and decentralized finance.

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