A Hong Kong official accepts that a Government-backed stablecoin would act as a superior passage highlight Web3 compared to private stablecoins.
Hong Kong authorities are searching for new plans for a Central bank digital currency (CBDC), presently proposing to give a CBDC as a stablecoin backed by the government.
Wu Jiezhuang, a member of the Legislative Council of the Hong Kong Special Administrative Region, trusts that turning the Hong Kong digital dollar (e-HKD) into a stablecoin would give advantages to the adoption of new technologies like Web3.
The option of developing e-HKD into a stablecoin can possibly address the risks related with virtual assets in Web3 successfully, Wu Jiezhuang said in a meeting with China Blockchain News on Jan. 5. According to the legislator, such a plan of the Hong Kong digital dollar would assist authorities with acquiring investors’ confidence in the Web3 industry and better safeguard users from issues like hacks.
“The stablecoins that are right now accessible in the market are completely given by a few privately owned businesses and are not expose to government oversight,” Wu Jiezhuang expressed, referring to failures of a few stablecoin projects in 2022, which caused a cascading type of influence on the Crypto market.
The legislator also brought up that the stablecoin could be connected to decentralized finance (DeFi) for better access in Web3 ecosystems, expressing:
“The Hong Kong government can consider whether the issuance of digital Hong Kong dollars can be connected with decentralized finance and become a significant infrastructure component of the virtual asset trading platform.”
Apart from his job as a Hong Kong Legislative Council member, Wu Jiezhuang is also a founding member of G-Rocket, a startup accelerator that expects to draw in 1,000 Web3 city-state will be home to organizations for the next three years. He co-established G-Rocket with Hong Kong legislative council member Jonny Ng Pack Chong in 2016.
Wu Jiezhuang is the latest government official to feature the likely advantages of the combination of CBDC and DeFi. Thomas Moser, an overseeing board member at the Swiss Public Bank, said in September 2022 that a CBDC could give greater solidness to DeFi and decrease the risks of its turn of events.