StableCoin enthusiasm has captured Hong Kong as the city prepares to introduce a licensing system for low volatile type of cryptocurrency, but authorities have warned against overplaying their future role in financial systems.
Digital units have been postponed as a cheap, easy way to make monetary transactions, and their popularity is increasing, with more than US $ 270 billion worldwide.
Unlike the intoxicating high and climbing of bitcoin, the value of most stabblecoin is kept stable by being associated with an existing national currency, mainly dollar, or gold -like object.
StableCoins are internationally useful as they enable rapid, low-cost border-par payment, work in markets where hard currency is limited, such as Argentina and Nigeria.
The tokens purchased and sold on digital exchanges are also used as a safe method for crypto investors, so that their profits can be placed at the station, rather than being converted into cash.
Global blockchain leader Paul Body at the consulting firm EY said, “The size of the Stabelcoin Market has reached a level where there are geopolitical implications in cash flow.”
Body told AFP that more than 99% Stabelcoin assets are in US dollars, so for other countries “if you are not a player, you can find yourself frozen”, Body told AFP.
The US Representative Assembly passed an Act this month, coding stabeloin use, which Senator Bill Higranty stated that “would ensure the dominance of the US dollar”.
Hong Kong’s own Stabecoin Rules arrive on Friday, which is part of a push to bring himself into position as an Asian Crypto Hub for supporting the sector of US President Donald Trump.
“Opportunities are largely,” Rita Liu said, whose payment company is developing a Hong Kong dollar-communized stabechoin in a government-run test.
RD Technologies CEO Liu said, “There is a wave to legalize the digital asset industry … Hong Kong is trying to be at the forefront of that wave.”
Body said Crypto Trading has been banned from 2021 in the mainland China, which sees it as “very close to gambling”.
He and others think that StableCoins can prove to be more acceptable for Beijing, who have used their own “e-Euan” Central Bank Digital currency.
Officials first want to see how things go on in the semi-late area of Hong Kong.
AD U, head of Hong Kong Monetary Authority, said last week, “a few dozen institutions” have expressed interest in issuing stabecoin or requested more information.
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“Some discussion on stabechoin can be highly idealistic,” U warned, especially around their “ability to disrupt the mainstream financial system”.
He said that promotional companies could increase stock prices, he said, a point that is echoed by Lily King of Cripto Company Cobo.
“Some applications may be affected by public relations strategies, as stabeloin-related news often enhances market spirit,” he said.
RD of RD, a former senior manager of the Chinese Payment Forum Alipay, feels “some of it is fake propaganda, and some is real”, “Hope of people in this industry” is fuel.
According to coingcko, stablecoins are about seven percent of global cryptocurrency market capitalization.
If they eventually become “a main basis of plumbing” in finance, Hong Kong enjoyed the “first-lover benefit”, Jonas Golterman said in Capital Economics.
Japan and Singapore already regulate stabechoin, while South Korea is discovering the possibility.
While StableCoin issues usually assure buyers that their currency is supported by real-world reserves, they are not risky-free, and sometimes distract from their pegged value due to problems with market fluctuations, technical issues or underlying assets.
Golterman said that there is also a risk that Stabcoin would become “more of a niche product”, if the banks make their own programable money, Golterman said.
“It makes sense to try to do anything for Hong Kong; it is on a decreasing path, for the reasons that are not with technology. It is mostly about politics and its relations with China,” he told AFP.
“It is not that stabechoin is a silver tablet that can cure it. But this does not mean that it cannot help.”
Published – July 30, 2025 11:10 AM IST
