Amid the economic downturn, the Hong Kong Chamber of Commerce and Industry (HKGCC) is promoting the issuance of stablecoins linked to the Chinese yuan as a way to recover the economy.
In a statement, the HKGCC expressed support for a yuan stablecoin in an attempt to ride on China’s recent economic upswing, given the proximity and interdependence of the two jurisdictions. In its budget submitted to the Finance Minister’s Office, the HKGCC made a proposal calling for the launch of stablecoins backed by the US dollar and other major global currencies.
Aside from plans to launch stablecoins, HKGCC said virtual asset linking plans will be key to the region’s planned economic recovery. However, the exact implementation of the plan is unclear, but the daily limit is HK$20 billion ($2.5 billion), according to sources.
There are plans to introduce a 5% digital services tax on service providers domiciled outside Hong Kong to support the operations of local businesses. The move is aimed at attracting global talent and service providers to Hong Kong, while increasing its attractiveness as ‘Asia’s leading business and financial hub’.
In addition to Web3, HKGCC has also rolled out a series of short-term relief measures to stimulate economic growth. First, the group is demanding a one-off refund on payroll tax and the removal of fees for special and double stamp duty.
Companies relocating their regional headquarters to Hong Kong can enjoy tax exemptions and corporate tax reductions for three years.
The most important impact of the HKGCC blueprint will be on financial markets, where it seeks to issue green bonds to spark economic activity. The internationalization of the Yuan represents a key strategy for Hong Kong’s long-term goals by improving the existing Connect regime and allowing trading in Yuan-denominated shares.
Other strategies for economic recovery promoted by HKGCC include stricter retirement protections, development of intellectual property trading centers and various government support schemes.
Hong Kong’s Web3 push
Hong Kong authorities are making significant inroads into Web3, encouraging global service providers to set up shop in the region. Some companies have adopted various strategies such as providing financial services, tax rebates, and government incentives.
Waste millions of dollars trying to take away their license to operate.
With strong stablecoin regulation underway, Hong Kong’s Securities and Futures Commission (SFC) is pushing new rules for asset tokenization and spot ETFs linked to digital assets.
“While the SFC sees the potential benefits of tokenization to financial markets, particularly in terms of increased efficiency, greater transparency, faster settlement times and lower costs of traditional finance, it also recognizes the new risks that arise from the use of this technology.” Read the SFC newsletter in November.
See: BSV’s stablecoin
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