Hong Kong's Stablecoin Ordinance came into effect on August 1, and more than 50 enterprises and institutions flocked to the Hong Kong Monetary Authority to apply for licenses, including cross-border trading giants such as an energy central enterprise and CITIC Group.

These companies see the opportunity of Hong Kong's stablecoin being pegged to offshore RMB and hope to achieve more convenient and low-cost cross-border payments through blockchain technology, bypassing the traditional SWIFT system. However, international financial organizations are concerned about anti-money laundering risks, and Hong Kong supervision faces a dilemma.

The industry predicts that offshore RMB stablecoins are the real large-scale direction of Hong Kong's stablecoin business.

Hong Kong stablecoin: A bridge connecting fiat currency and blockchain

To put it simply, the stablecoin launched in Hong Kong this time is a cryptocurrency that is pegged 1:1 to fiat currency (fiat currency). This means that each unit of stablecoin is backed by a corresponding unit of fiat currency.

Like what:

HKD stablecoins: 1 HKD stablecoin corresponds to 1 HKD;

CNH stablecoin: Every CNH stablecoin corresponds to 1 CNH.

The advantage of this design is that it effectively reduces the "rollercoaster" volatility of traditional cryptocurrencies and provides a relatively stable means of payment.

Why Hong Kong Stablecoins?

1. Cross-border payment is more convenient

Stablecoins based on blockchain technology have significant advantages in cross-border payments: fast speed: transfer money in seconds without waiting for complex interbank clearing processes; Low cost: significantly lower costs compared to traditional wire transfers or SWIFT systems; High transparency: All transaction records are publicly available on the blockchain, increasing trust.

2. Reasons for corporate favoritism

Many large companies, especially those involved in cross-border trade, such as an energy state-owned enterprise giant and CITIC Group, have shown strong interest in Hong Kong stablecoins.

The reasons are: improve efficiency: simplify cross-border payment processes and shorten settlement time; Reduce costs: reduce exchange rate conversion and handling fees; Enhanced liquidity: More flexibility in the flow of funds in the form of stablecoins.

While these companies are currently more inclined to use more liquid currencies (such as Hong Kong dollars or US dollars), their ultimate goal is to use offshore RMB-pegged stablecoins in the long run.

Stablecoins are fragrant, but the risks are not small

To understand the risks of stablecoins, we must first understand how they work.

Pre-issuance: highly centralized and tightly tied to the banking system. Issuers must deposit the equivalent amount of fiat currency (e.g., HKD, USD, CNH) into a bank custody account; this process is done entirely within the traditional financial system, subject to the supervision of banks and regulators.

After issuance: enter the decentralized world. Once stablecoins are on the chain, they can flow freely peer-to-peer in the blockchain network; no longer rely on bank accounts, with fast transaction speed, low cost, and barrier-free cross-border access. Here comes the key point: the issuance link is controllable, but the circulation link "decouples" the banking system. This brings regulatory challenges

Will it be exploited by the "sanction target"?

Because stablecoins can be freely transferred on-chain, some people are worried about whether countries or institutions sanctioned by international financial organizations (such as OFAC) will bypass regulation through stablecoins? For example, a sanctioned entity receives stablecoins through an anonymous wallet and then exchanges them for legal currency; Or utilize cross-chain bridges to move funds into unregulated networks.

This situation is not without precedent. In the past, there have been cases where some illegal funds have been transferred across borders through stablecoins such as USDT. Therefore, Hong Kong's stablecoin pool must not become a "money laundering channel" or a "sanctions avoidance tool".

In the face of these risks, the Hong Kong Monetary Authority (HKMA) reacted very quickly: on July 29, the HKMA accelerated the issuance of anti-money laundering guidelines in the Stablecoin Ordinance. It is clearly required that all stablecoin issuers have strong anti-money laundering capabilities in order to obtain a license.

Huge potential in cross-border trade: offshore RMB stablecoins

First, the good news is that there are no specific restrictions on the pegged currency of stablecoins in Hong Kong. This means that issuers are free to choose which currency to link (such as USD, HKD, CNH, etc.); The HKMA also does not set specific issuance size requirements, giving the market a lot of flexibility. This sounds open, but in practice, stablecoins of different currencies have very different fates.

The most popular stablecoins on the market are mainly USDT and USDC, which are pegged to the US dollar: USDT (issued by Tether): market capitalization exceeds $150 billion; USDC (issued by Circle): The market value has also reached more than $68 billion; Combined: the market size is close to $250 billion. These figures tell us that US dollar stablecoins are still the mainstream of the market, especially in cross-border payments and international trade.

In contrast, the size of Hong Kong dollar stablecoins appears small. According to industry insiders, Hong Kong dollar stablecoins do have a certain market demand, mainly concentrated in local financial products denominated in Hong Kong dollars; However, due to the relatively limited application scenarios, its overall scale is not large, and the growth space is relatively limited. Hong Kong dollar stablecoins are more like "local specialties", suitable for specific scenarios, but difficult to become mainstream.

However, the real highlight lies in the offshore yuan stablecoin. Why do you say that?

1. The demand for cross-border trade

At present, many cross-border trade institutions are already using US dollar stablecoins for payment and settlement; However, as China's economic influence grows in the world, more and more companies want to use RMB as the settlement currency; This makes offshore RMB stablecoins have huge application prospects in cross-border trade.

2. Policy support and market opportunities

As an international financial centre, Hong Kong is uniquely positioned to develop offshore RMB business. By issuing and promoting offshore RMB stablecoins, it can not only enhance the internationalization of RMB, but also bring new economic growth points to Hong Kong.

Offshore RMB stablecoins could be the new darling of cross-border trade in the future, especially in the Asian market.