July 07, 2025
By Anjali Kochhar
Economist and former People’s Bank of China adviser Huang Yiping has suggested that Hong Kong could serve as an ideal launchpad for a stablecoin pegged to the offshore yuan. The move could support Beijing’s long-term goal of yuan internationalisation while sidestepping the capital controls in mainland China.
In a recent interview with Yicai, cited by the South China Morning Post (SCMP), Huang explained that issuing a stablecoin within the mainland would be extremely difficult due to the country’s closed capital account. “As China’s capital account is not fully liberalised, it would be very difficult to roll out a stablecoin domestically,” he said.
Instead, he pointed to Hong Kong’s more open financial system and mature regulatory framework. Huang noted that Hong Kong has already shown a more progressive stance toward financial innovation compared to the mainland. The city recently passed a law to regulate stablecoins, setting global benchmarks for licensing, reserve backing, regular audits, and redemption mechanisms. These rules are set to take effect from August 1.
However, Huang raised concerns about the long-standing peg between the Hong Kong dollar and the US dollar. “The issue with issuing a stablecoin in Hong Kong is that if it’s pegged to the Hong Kong dollar, which in turn is pegged to the US dollar, ultimately it’s the US dollar that plays the foundational role,” he told SCMP.
Huang’s comments align with the views of several financial leaders and crypto experts who have been promoting Hong Kong as a testbed for yuan-linked digital currencies. Xiao Feng, chairman of HashKey Group, previously described Hong Kong as “a testing ground for the mainland” due to its unique status under the “one country, two systems” principle.
Morgan Stanley analysts have also highlighted the city’s large offshore yuan liquidity pool estimated at one trillion yuan as a major advantage for stablecoin development. In addition, the Hong Kong government’s latest digital asset policy blueprint promotes public use of stablecoins and includes tax concessions for digital asset holders starting in 2025.
Industry leaders like Animoca Brands’ chairman Yat Siu have praised the new stablecoin law, saying Hong Kong is leapfrogging global competition in digital finance. At the same time, legal experts have warned that compliance costs could be a challenge for smaller players.
Huang’s proposal reflects a growing belief that Hong Kong could play a pivotal role in bridging China’s financial system with global digital innovation, especially in the realm of stablecoins.
About the author
Anjali Kochhar covers cryptocurrency and blockchain stories in India as well as globally. Having been in the field of media and journalism for over four years now, she has developed a sharp news sense and works hard to present information that goes beyond the obvious. She is an avid reader and loves writing on a wide range of subjects.
