Tokenisation a ‘defining trend’ for Web3 in Hong Kong as city hosts major Consensus event.
The growing strength of stablecoins as a bridge between Web3 and traditional finance could give an edge to markets like Hong Kong, which has its currency pegged to the US dollar (USD), but the Asian financial hub still faces challenges in attracting major blockchain businesses.
The Hong Kong dollar’s peg to the US currency is seen as a unique advantage for the city, as the majority of stablecoin trading activity happens through cryptocurrencies backed by the US dollar. This can help smooth out business operations for companies whose main asset holdings are also pegged to the USD, including the largest stablecoins Tether (USDT) and Circle’s USD Coin (USDC).
The preference for US dollar-backed stablecoins is so strong that some have seen the technology has further entrenching the dollar’s position in global finance, as a one-for-one peg requires a large reserve of the currency – something that is increasingly being enforced by law, including in Hong Kong with its pending stablecoin regulation.
“The reality is everybody, everywhere in the world – China and everywhere else included – wants dollars,” said Chris Maurice, CEO of the Africa-focused stablecoin exchange Yellow Card. “This is why you have US$200 billion now in market cap in USD stablecoins.”
Source: SCMP
