Exclusive Interview with Hong Kong Legislative Councilor Duncan Chiu: Stablecoins Have No Room for Speculation, Need to Explore New Markets and Scenarios – Hong Kong’s Stablecoin Ordinance Takes Effect as Global Regulatory Pioneer
On August 1st, Hong Kong’s Stablecoin Ordinance officially came into force, marking the world’s first comprehensive regulatory framework for fiat-backed stablecoins. Legislative Councilor (Technology and Innovation Sector) Duncan Chiu, who participated in the entire legislative process and chaired the Stablecoin Bill Committee, stated in an interview that this is a crucial step for Hong Kong to enhance its status as an international financial center and build a new-generation fintech system, reflecting the SAR government’s forward-looking financial top-level design.
Regulatory Core: Fiat-Backed Stablecoins ≠ “Speculative Assets”, 100% Reserves Ensure Safety
Chiu emphasized that the “stablecoins” regulated by the Ordinance specifically refer to fiat-backed stablecoins, with the core feature of 100% backing by highly liquid monetary assets. “Their current main function is international payments, with no room for speculation,” he clarified, urging the market to correct misunderstandings: these assets are not for speculation but to regulate fund operations through supervision and boost market confidence—this is why Hong Kong launched a “practical regulatory plan” while some countries/regions still lack similar frameworks.
Initial Market Phase: Limited Participants Expected, Usage May Rise in 6-12 Months
Regarding post-ordinance market response, Chiu predicted “fewer initial participants,” describing this as a “market testing and adaptation phase.” He noted that Hong Kong-issued stablecoins have a foundation for global acceptance but require issuers to actively promote adoption. With growing international payment demand, he expects stablecoin usage and effectiveness to significantly increase in the next 6 to 12 months.
Global Perspective: Learning from International Experience, Aligning Standards to Facilitate Interoperability
During the legislative process, Hong Kong referenced international experiences from the US, EU (MiCA), and Singapore (PSA), resulting in regulatory standards close to those of US stablecoin legislation. Chiu believes this “standard alignment” will facilitate cross-border use of stablecoins. He added that while Hong Kong is not the first to regulate stablecoins, its plan “focuses on addressing market needs” and will be continuously improved based on practice.
Future Direction: Focus on Blockchain Transformation, Explore New Stablecoin Scenarios
Explaining the strategic considerations behind the legislation, Chiu stated that blockchain has become a key direction for future financial system transformation due to its ability to efficiently handle high-frequency transactions and solve issues like high costs and delays in traditional payments. As a core application in the blockchain ecosystem, stablecoins have shown advantages in international payments—”faster, lower fees, and continuously improving security”—with global transaction volume surpassing traditional giants like Visa and Mastercard in just a few years.
He stressed that Hong Kong’s stablecoin development is “both forward-looking and steady,” focusing on “exploring new markets and scenarios” rather than competing for existing market share. “Blockchain finance needs practical applications, and stablecoins have far more potential than we currently see.”
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This content is AI-generated and does not constitute investment advice. Please exercise your own rational judgment.
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