Hong Kong wants to provide a stablecoin feature with national CBDC
A Hong Kong government official wants to push the national CBDC into the Decentralised Finance (Defi) sector.
The Central Bank Digital Currency (CBDC) is a concept of Centralised digital currency, which came into light after the entry of stablecoins in the Crypto market. In the present time, many Central Banks are working on their CBDC, to achieve modernization in their payment system.
Recently, During a Chinese Media interview, a member of Hong Kong’s Legislative Council and a member of China’s advisory body, the Chinese People’s Political Consultative Conference, Johnny Ng suggested to set up a rating agency for digital assets and also consider the development to allow the use of national CBDC, or say e-HKD, in the decentralised finance (Defi).
The Hong Kong lawmaker also said that the national CBDC could fight against the risks associated with existing stablecoins in the Crypto market, issued by private companies. He also noted that e-HKD may solve the risks associated with web 3.0 & virtual assets significantly.
Johnny Ng said:
“The stablecoins on the market now are issued by private companies and are not subject to government regulation, and many worry about related risks.”
In Q4 2022, The Hong Kong central financial agency ran a multi-phase trial of the CBDC test. Few reports noted that a better ecosystem for the use of e-HKD will be available in the next three years, where users & issuers will be able to manage their funds in the form of CBDC easily.
It is worth noting that latest suggestions from the Hong Kong lawmaker came just after the news of the slow CBDCs adoption rate, issued by different central Banks. Recently Chinese government officials noted that the majority of the citizens were not showing significant Inclination toward the digital Yuan (Chinese CBDC). The Nigerian Central Bank also noted that the adoption of the e-Naira has been only 0.5% in the last year.
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