As part of its 2024–2025 budget, the city of Hong Kong has provided specifics about the development of new Web3 and digital yuan initiatives. As part of its digital finance plans, Hong Kong Financial Secretary Paul Chan announced in a speech that the city would expand the digital yuan pilot and expedite the creation of a Web3 sandbox for stablecoins.
Hong Kong is going to launch the Digital Yuan Pilot Expansion and Web3 Stablecoin Sandbox.
Hong Kong declared that it will implement a number of new initiatives and regulations in 2024. The extension of these measures would be concentrated on quickening the promotion of high-quality development of the city’s digital economy, according to a speech made by Financial Secretary Paul Chan.
In addition to the tokenized deposits, offline payments, and programmable payments that were examined in the e-HKD’s first phase, Chan declared that the CBDC’s second phase would investigate new use cases. The city will also broaden the pilot program for digital yuan in Hong Kong.
Regarding this, Chan clarified that people will establish digital yuan wallets using funds from the Faster Payment System (FPS), a use case that was tried out at the October 19 Asian Games. This will improve “the efficiency and user experience of cross-border payment services,” he said.
In addition, Chan disclosed that the city would allow institutions to test the issuing of stablecoins in a sandbox setting in order to maintain financial stability without sacrificing innovation. Participants in this sandbox will be able to conduct trials to evaluate the stablecoins’ “issuance process, business models, investor protection, and risk management systems.” It will also come up in discussions about how these assets will be regulated in the future.
The city was getting ready to improve the regulation of over-the-counter (OTC) cryptocurrency marketplaces in January. Under Secretary for Financial Services and the Treasury Joseph Chan Ho-lim claims that mainland Chinese investors in bitcoin assets are still using these platforms as a conduit.
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