4 days ago
- Business
- South China Morning Post
What's the future of Hong Kong stablecoins? A cross-border payment tool, insiders say
Stablecoins are poised to become a major cross-border payment tool that would benefit issuers in Hong Kong and mainland Chinese firms expanding overseas, according to industry insiders, as the city and the US push forward regulation of the popular tokens.
A stablecoin is a type of
cryptocurrency that maintains a fixed value by being pegged to a reference asset, typically fiat currencies such as the US dollar.
'I believe stablecoins will become the next-generation payment system – that is beyond doubt,' Teddy Liu, chief executive of
Jingdong Coinlink Technology , a subsidiary of Chinese
e-commerce giant
, said at an event in Hong Kong on Wednesday.
Jingdong Coinlink has emerged as one of the biggest players in Hong Kong's nascent stablecoin space, after the city
passed a law last month that establishes a regulatory regime for these tokens.
The company, a participant in the city's regulatory sandbox trial, is preparing to launch stablecoins pegged to both the Hong Kong dollar and the US dollar. Depending on Beijing's approval, the firm may also issue offshore yuan-pegged stablecoins in the future, according to Liu.
He pointed out that Jingdong Coinlink's goal was to address cross-border settlement problems that businesses face in global trade.
'For cross-border trade, especially among small to medium-sized enterprises, international payments are cumbersome,' Liu said. 'There are problems such as a lack of dedicated services, high costs, low efficiency and lack of transparency.'
