Hong Kong Legislator Proposes Turning Central Bank Digital Currency into Stablecoin with DeFi Features

Hong Kong authorities are considering issuing a central bank digital currency (CBDC) in the form of a stablecoin backed by the government.

Wu Jiezhuang, a member of the Legislative Council of the Hong Kong Special Administrative Region, believes that turning the Hong Kong digital dollar (e-HKD) into a stablecoin could address the risks associated with virtual assets in Web3, attract investors’ trust in the Web3 industry and better protect users from issues like hacks.

The stablecoin could also be connected to decentralized finance (DeFi) for better access in Web3 ecosystems.

Wu Jiezhuang is also a founding member of G-Rocket, a startup accelerator that aims to attract 1,000 Web3 businesses to Hong Kong over the next three years.

His proposal follows comments from Swiss National Bank governing board member Thomas Moser, who said in September 2022 that a CBDC could provide more stability to DeFi and reduce its risks.