Web3 Experts: Hong Kong Government-Backed Stablecoin Can Become a Global Currency, Challenge Dollar Dominance

According to Wang Yang and Wen Yizhou, a stablecoin issued by the Hong Kong government has the potential to become an international currency and may challenge the U.S. dollar in certain places. However, in their latest opinion piece, Yang and Yizhou said the envisaged stablecoin will only succeed if Hong Kong acts before the currency’s “window of opportunity closes.”

Challenging U.S. Dollar Dominance

The Hong Kong government has been urged to consider launching a stablecoin which is backed by the Chinese Special Administrative Region (SAR)’s currency — the Hong Kong dollar. In their new opinion piece on the subject, the authors, Wang Yang and Wen Yizhou of the Hong Kong Web3.0 Association, argue that developments in the field of real-world assets (RWAs) tokenization, as well as other major entities’ stablecoin plans, all highlight why Hong Kong needs to launch the stablecoin.

According to Yang and Yizhou, when the Hong Kong stablecoin is eventually issued, it will not only become an international currency but will potentially challenge the U.S. dollar’s dominance in certain places. However, the authors said Hong Kong needs to act before the “window of opportunity” closes.

“We have a narrow window of opportunity to truly transform Hong Kong into a major international hub for Web3. We anticipate that this window of opportunity will remain open for no more than a year,” the two authors wrote.

Yang and Yizhou added that if Hong Kong were to launch ahead of U.S.-based entities, such digital currency would still be able to maintain its leading position even after more stablecoins are issued. Moreover, even if the market capitalization of RWA tokenization were to grow to trillions of dollars, the Hong Kong stablecoin would still be able to hold its own, the two authors argued.

Possibilities Arising From Tokenization of Real-World Assets

Meanwhile, the two authors also explained how RWA tokenization can potentially enhance transaction transparency and broaden liquidity. The greater transparency and better liquidity will in turn lead to more efficient traditional financial markets.

“This approach addresses the inefficiency of the traditional financial system while bridging the gap between digital assets and the physical economy, thus promoting the development of Web3,” the two authors wrote.

Although Hong Kong is said to be uniquely positioned to lead in the field of RWA tokenization, Yang and Yizhou said capitalizing on this is only possible if the issuance of the stablecoin is perfectly timed. Continued delays in launching the digital currency will see Hong Kong being overtaken by U.S.-based entities, the authors argued.

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