- The HKGCC recommends crypto proposals to stimulate the economy.
- These proposals put forward strengthening ties to mainland China.
- Beijing is actively internationalizing the yuan.
Hong Kong is attempting to establish itself as Asia’s leading crypto hub. Recent initiatives include the implementation of a crypto exchange licensing regime and the exploration of stablecoin integration. These strategic moves underscore Hong Kong’s commitment to fostering a crypto-friendly landscape.
In line with this commitment, the influential trade group, the Hong Kong General Chamber of Commerce (HKGCC), recently revealed its economic stimulus proposals. These proposals aim to strengthen Hong Kong’s economy amid ongoing global challenges.
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Amid the raft of proposals that include tax rebates and cutting bureaucracy, the HKGCC also included suggestions to boost the Hong Kong crypto industry by developing a yuan-backed stablecoin and a “Virtual Asset Connect Scheme,” sparking intrigue among crypto enthusiasts.
Hong Kong Crypto Industry Boost
The HKGCC recently proposed intriguing proposals that could significantly impact Hong Kong’s crypto ambitions. One area of particular interest is the exploration of a “Virtual Asset Connect Scheme” (VACS).
In a formal communication addressed to the Hong Kong government, the HKGCC outlined the VACS as a strategic mechanism designed to facilitate connections between mainland Chinese companies and Hong Kong’s burgeoning crypto market. Further details were not given, only that the VACS should have an initial HK$20 billion (US$2.6 billion) daily budget.
“This scheme would enable Mainland companies to leverage Hong Kong as a platform for conducting virtual asset trading with global counterparts. Such an incentive would foster the growth of the virtual asset industry and reinforce Hong Kong’s position as an international financial hub,” stated the HKGCC.
While the HKGCC sees value in linking the mainland legacy system and Hong Kong’s crypto market to boost the local economy, the proposal is a two-pronged approach that ties with issuing a yuan stablecoin.
Yuan Stablecoin
The HKGCC also recommended the issuance of a yuan stablecoin, or stablecoin backed by a mixed basket of currencies that includes the yuan. The trade organization stated that such a move would “promote the broader adoption of RMB and facilitate international trade transactions.”
Beijing is already pushing for the internationalization of the yuan, including the recent launch of a pilot program between China and Singapore that enables travelers between jurisdictions to pay for goods and services in digital yuan. Additionally, Beijing is ramping up efforts to settle cross-border oil and precious metals payments in yuan.
On the Flipside
- Tether launched its yuan stablecoin “CNH₮” in 2019.
- The HKGCC‘s inclusion of crypto proposals for economic stimulus points to the growing role of digital assets in mainstream economics.
- The VACS suggests Beijing is softening its hardline stance towards cryptocurrency.
Why This Matters
Aside from the crypto proposals punctuating the HKGCC’s broader economic plans, this collaborative stance highlights Hong Kong’s further assimilation with mainland China, dealing a huge blow to the fading notion of Hong Kong independence.
Read about China’s attempt to stamp down on crypto crime here:
China Overhauls Crypto AML Laws in Response to Rising Crimes
Find out about Solana’s outage being blamed on incompetence and foul play here:
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