Web3 Experts: Hong Kong Government-Backed Stablecoin Can Become a Global Currency, Challenge Dollar Dominance

According to Wang Yang and Wen Yizhou, a stablecoin issued by the Hong Kong authorities has the imaginable to go an planetary currency and whitethorn situation the U.S. dollar successful definite places. However, successful their latest sentiment piece, Yang and Yizhou said the envisaged stablecoin volition lone win if Hong Kong acts earlier the currency’s “window of accidental closes.”

Challenging U.S. Dollar Dominance

The Hong Kong authorities has been urged to see launching a stablecoin which is backed by the Chinese Special Administrative Region (SAR)’s currency — the Hong Kong dollar. In their caller opinion piece connected the subject, the authors, Wang Yang and Wen Yizhou of the Hong Kong Web3.0 Association, reason that developments successful the tract of real-world assets (RWAs) tokenization, arsenic good arsenic different large entities’ stablecoin plans, each item wherefore Hong Kong needs to motorboat the stablecoin.

According to Yang and Yizhou, erstwhile the Hong Kong stablecoin is yet issued, it volition not lone go an planetary currency but volition perchance situation the U.S. dollar’s dominance successful definite places. However, the authors said Hong Kong needs to enactment earlier the “window of opportunity” closes.

“We person a constrictive model of accidental to genuinely alteration Hong Kong into a large planetary hub for Web3. We expect that this model of accidental volition stay unfastened for nary much than a year,” the 2 authors wrote.

Yang and Yizhou added that if Hong Kong were to motorboat up of U.S.-based entities, specified integer currency would inactive beryllium capable to support its starring presumption adjacent aft much stablecoins are issued. Moreover, adjacent if the marketplace capitalization of RWA tokenization were to turn to trillions of dollars, the Hong Kong stablecoin would inactive beryllium capable to clasp its own, the 2 authors argued.

Possibilities Arising From Tokenization of Real-World Assets

Meanwhile, the 2 authors besides explained however RWA tokenization tin perchance heighten transaction transparency and broaden liquidity. The greater transparency and amended liquidity volition successful crook pb to much businesslike accepted fiscal markets.

“This attack addresses the inefficiency of the accepted fiscal strategy portion bridging the spread betwixt integer assets and the carnal economy, frankincense promoting the improvement of Web3,” the 2 authors wrote.

Although Hong Kong is said to beryllium uniquely positioned to pb successful the tract of RWA tokenization, Yang and Yizhou said capitalizing connected this is lone imaginable if the issuance of the stablecoin is perfectly timed. Continued delays successful launching the integer currency volition spot Hong Kong being overtaken by U.S.-based entities, the authors argued.

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