Hong Kong lawmaker wants to turn CBDC into stablecoin featuring DeFi

Hong Kong authorities are looking for caller designs for a central slope integer currency (CBDC), present proposing to contented a CBDC successful the signifier of a stablecoin backed by the government.

Wu Jiezhuang, a subordinate of the Legislative Council of the Hong Kong Special Administrative Region, believes that turning the Hong Kong integer dollar (e-HKD) into a stablecoin would supply benefits for the adoption of caller technologies similar Web3.

The enactment of processing e-HKD into a stablecoin has the imaginable to code the risks associated with virtual assets successful Web3 effectively, Wu Jiezhuang said successful an interrogation with China Blockchain News connected Jan. 5. According to the lawmaker, specified a plan of the Hong Kong integer dollar would assistance authorities summation investors' spot successful the Web3 manufacture and amended support users from issues similar hacks.

“The stablecoins that are presently disposable successful the marketplace are each issued by immoderate backstage companies and are not taxable to authorities supervision,” Wu Jiezhuang said, referring to failures of respective stablecoin projects successful 2022, which caused a domino effect connected the crypto market.

A photograph of Wu Jiezhuang. Source: The Limited Times

The lawmaker besides pointed retired that the stablecoin could beryllium connected to decentralized concern (DeFi) for amended entree successful Web3 ecosystems, stating:

“The Hong Kong authorities tin see whether the issuance of integer Hong Kong dollars tin beryllium connected with decentralized concern and go an important infrastructure constituent of the virtual plus trading platform.”

Apart from his relation arsenic a Hong Kong Legislative Council member, Wu Jiezhuang is besides a founding subordinate of G-Rocket, a startup accelerator that aims to pull 1,000 Web3 businesses to acceptable up store successful the city-state implicit the adjacent 3 years. He co-founded G-Rocket with Hong Kong legislative assembly subordinate Jonny Ng Kit-Chong successful 2016.

Related: How crypto could beryllium bully for CBDC and vice versa: Industry exec explains

Wu Jiezhuang is the latest authorities authoritative to item the imaginable benefits of the operation of CBDC and DeFi. Thomas Moser, a governing committee subordinate astatine the Swiss National Bank, said successful September 2022 that a CBDC could supply much stableness to DeFi and trim the risks of its development.

Previously, Mikkel Morch, enforcement manager astatine the integer plus hedge money ARK36, suggested that a CBDC doesn’t person to beryllium a rival to a backstage oregon decentralized cryptocurrency. At the aforesaid time, a CBDC could perchance diminish the relation of backstage stablecoins, helium noted.