Hong Kong lawmaker wants to turn CBDC into stablecoin featuring DeFi

Hong Kong authorities are on the lookout for new designs for a central financial institution digital forex (CDBC), now proposing to difficulty a CBDC within the type of a stablecoin backed by the federal government.

Wu Jiezhuang, a member of the Legislative Council of the Hong Kong Particular Administrative Area, believes that turning the Hong Kong digital greenback (e-HKD) right into a stablecoin would supply advantages for the adoption of recent applied sciences like Web3.

Related articles

Hector Swap: A revolutionary DeFi swap aggregator

2023-04-13

Fantom: Though DeFi-friendly measures show results, FTM remains in limbo

2023-04-11

The choice of growing e-HKD right into a stablecoin has the potential to handle the dangers related to digital belongings in Web3 successfully, Wu Jiezhuang said in an interview with China Blockchain Information on Jan. 5. In line with the lawmaker, such a design of the Hong Kong digital greenback would assist authorities achieve buyers’ belief within the Web3 business and higher shield customers from points like hacks.

“The stablecoins which are at present out there available in the market are all issued by some personal corporations and are usually not topic to authorities supervision,” Wu Jiezhuang stated, referring to failures of a number of stablecoin tasks in 2022, which triggered a domino impact on the crypto market.

The lawmaker additionally identified that the stablecoin could possibly be linked to decentralized finance (DeFi) for higher entry in Web3 ecosystems, stating:

“The Hong Kong authorities can think about whether or not the issuance of digital Hong Kong {dollars} could be linked with decentralized finance and turn out to be an necessary infrastructure part of the digital asset buying and selling platform.”

Aside from his position as a Hong Kong Legislative Council member, Wu Jiezhuang can also be a founding member of G-Rocket, a startup accelerator that goals to draw 1,000 Web3 companies to arrange store within the city-state over the following three years. He co-founded G-Rocket with Hong Kong legislative council member Jonny Ng Package-Chong in 2016.

Associated: How crypto could possibly be good for CBDC and vice versa: Trade exec explains

Wu Jiezhuang is the newest authorities official to spotlight the potential advantages of the mix of CBDC and DeFi. Thomas Moser, a governing board member on the Swiss Nationwide Financial institution, stated in September 2022 {that a} CBDC might present extra stability to DeFi and scale back the dangers of its growth.

Beforehand, Mikkel Morch, government director on the digital asset hedge fund ARK36, recommended {that a} CBDC doesn’t must be a competitor to a personal or decentralized cryptocurrency. On the identical time, a CBDC might probably diminish the position of personal stablecoins, he famous.