Chinese Analyst Sees $1 Trillion Stablecoin Market on the Horizon

Key Points

1. Hong Hao argues that HKD-backed stablecoins may offer greater reliability than U.S.-based ones, citing the strength of the Hong Kong Monetary Authority’s foreign reserves.

2. He points to past issues with U.S.-issued stablecoins, such as USDC’s depegging events, to suggest that the U.S. framework is not yet mature or completely safe.

3. Hong acknowledges the tension between the benefits of stablecoins in cross-border trade and the need for regulatory oversight, emphasizing the challenge of maintaining monetary control without stifling innovation.

4. Stablecoins decentralize payment systems, raising concerns for regulators over control, compliance, and systemic risk management.

5. Hong Kong is in talks with prospective stablecoin firms, indicating growing interest and potential development in the stablecoin market.