Hong Kong stablecoin: anchoring cross-border payments and RWA New opportunities for tokenization!

Against the backdrop of accelerating global digital currency regulation and adoption, Hong Kong has charted a clear policy course for stablecoin development. The Hong Kong Monetary Authority has explicitly stated that stablecoins will prioritise two core areas: cross-border trade settlement and Web3 scenario testing. Concurrently, it will explore their use as alternative payment instruments to mitigate local currency volatility along the Belt and Road regions.

Cross-border payments have long suffered from cumbersome processes, high costs, and protracted settlement cycles. Traditional models rely on the SWIFT system, necessitating clearing through multiple intermediary banks. A single payment often takes 3-5 working days, with persistently high transaction fees and exchange rate fluctuation costs squeezing the profits of small and medium-sized enterprises. Stablecoins pegged to fiat currencies, leveraging blockchain's peer-to-peer instant transfer capabilities, can significantly shorten settlement cycles, offering a new pathway to address these industry pain points.

Hong Kong's Monetary Authority has prioritised cross-border trade settlement precisely because of this technological advantage. Businesses using compliant stablecoin platforms for payment settlements benefit from fully traceable transaction records on the blockchain, reducing fraud risks while eliminating intermediary clearing fees and currency conversion costs. This exploration extends further into the Belt and Road markets. For certain emerging economies along the route, where local currencies experience significant volatility and foreign exchange controls are stringent, stablecoins offer an efficient, low-cost settlement alternative. This facilitates trade and investment while simultaneously propelling Hong Kong's stablecoin ecosystem to radiate internationally.

While cross-border payments represent stablecoins' practical implementation, Web3 scenario testing constitutes their frontier exploration in empowering digital economic innovation. Real-world asset (RWA) tokenisation stands as a core potential direction for Web3, with stablecoins serving as the pivotal link connecting tangible assets to on-chain ecosystems. RWA tokenisation converts tangible assets like real estate and bonds into tradable digital tokens, overcoming geographical and access barriers while enhancing liquidity. Stablecoins serve as pricing and settlement instruments for these transactions, providing reliable valuation benchmarks and enabling instant clearing to boost transaction efficiency.

The Hong Kong Monetary Authority's inclusion of stablecoins in its Web3 testing effectively paves the way for scaling RWA tokenisation. Building upon Hong Kong's established virtual asset regulatory framework, promoting stablecoin testing within RWA scenarios can attract participation from traditional financial institutions and Web3 enterprises. This fosters a virtuous cycle of ‘asset tokenisation – stablecoin trading – compliant oversight’. Synergy between these two domains will propel Hong Kong towards establishing a ‘virtual-physical convergence’ stablecoin ecosystem, positioning it as a bridge connecting traditional finance with the digital economy.