In recent months, legislative efforts around stablecoins have accelerated globally. Hong Kong is set to implement its Stablecoin Ordinance soon, the U.S. is advancing the Clarity for Payment Stablecoins Act, and the UK's Financial Conduct Authority (FCA) has released a consultation paper on stablecoin issuance.
"Hong Kong, as a key global financial hub, must align with stablecoin trends. Its Stablecoin Ordinance marks a pivotal step in global stablecoin regulation," stated Dr. Xiao Feng, Chairman and CEO of HashKey Group, in an exclusive interview.
Stablecoins in Cross-Border Payments: Efficiency, Cost, and Accessibility
The primary use case for stablecoins lies in cross-border payments, offering:
- Lower costs (up to 90% reduction vs. traditional methods)
- Near-instant settlement (under 10 seconds)
- Reduced intermediaries, simplifying transactions
Dr. Xiao emphasized that small-to-medium enterprises (SMEs), particularly e-commerce merchants, stand to benefit most. "Stablecoins streamline cross-border settlements, but challenges remain in converting them to fiat currencies like RMB due to regulatory gaps," he noted. Hong Kong’s licensed exchanges (e.g., HashKey Exchange) bridge this by enabling USD/HKD conversions compliantly.
👉 Explore how stablecoins could revolutionize your business payments
Retail Adoption: A Gradual Process
For mainstream retail use, Dr. Xiao highlighted critical hurdles:
- Payment infrastructure must support stablecoin acceptance (e.g., QR codes, POS systems).
- User experience must rival traditional methods (e.g., Alipay, WeChat Pay).
"Adoption won’t happen overnight—it’s a 10+ year transition," he projected, predicting stablecoins could eventually capture 30–40% of global payment volume.
Onshore Exchanges: Bridging Crypto and Traditional Finance
Unlike offshore exchanges, onshore platforms like HashKey prioritize:
- Regulatory compliance (KYC/AML adherence)
- Integration with traditional banking systems
- Asset tokenization (e.g., partnerships with GF Securities for tokenized securities)
"Stablecoins expand use cases here—think tokenized funds or collateralized loans," Dr. Xiao added.
The Potential of a RMB Stablecoin
With China’s central bank exploring CBDCs, Dr. Xiao proposed a two-tier model:
- Wholesale layer: Licensed issuers deposit RMB reserves into CBDC accounts.
- Retail layer: Issuers mint equivalent stablecoins for circulation.
"Hong Kong could pilot an offshore RMB stablecoin, then gradually link to mainland FT accounts (e.g., in Hainan or Greater Bay Area)," he suggested, underscoring benefits for RMB internationalization.
FAQ
Q: How soon could stablecoins disrupt SWIFT?
A: Decentralized stablecoin networks may bypass SWIFT’s reconciliation functions, but full displacement is years away.
Q: Will HashKey issue its own stablecoin?
A: No—it operates as a neutral platform (e.g., hosting HKDR, a HKD-pegged stablecoin by partner RD InnoTech).
Q: What’s the biggest barrier to RMB stablecoins?
A: Regulatory approval and technical integration with CBDC systems.
👉 Learn more about compliant stablecoin solutions
Stablecoins represent both an evolutionary leap in payments and a test of regulatory agility. Their success hinges on balancing innovation with risk mitigation—a challenge Hong Kong is poised to lead.
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