Main axes:
- The Hong Hao economist expects the market value of the stable currency sector to exceed a barrier of a dollar billion.
- He believes that stable currencies supported by the Hong Kong dollar can be more reliable compared to those based in the United States.
- The demand for bonds of the US Treasury could increase, but continuous demand in the future will depend on financial confidence in the United States.
In the comments made during an electronic symposium and was later published in Investment News, Hong Hao – the administrative partner of Lotus Asset Management – expected that the market value of stable currencies reaches a billion of dollars in the near future despite its current market value, due to the entry of more companies in this area.
A comparison of stable currencies in the Hong Kong dollar and its counterparts in the US dollar
Hao explained that the majority of stable currencies that are released in Hong Kong will be placed in the Hong Kong dollar, and not supported by the obligations of the US Treasury, citing the power of exchange reserves of the Hong Kong cash authority. “The stable currencies issued in Hong Kong can be more stable than those issued in the United States,” added Hao, given the clarity of the organizational environment in Hong Kong and resources.
He also indicated that certain Chinese technological companies have obtained licenses to issue stable currencies, but many parties are still working to put appropriate operational models.
Howe concluded his speech by saying that the structure of the stable currency market can increase the demand for American cash obligations, but the continuation of long-term demand depends on the financial situation of the United States.
He specifically referred to the previous fixing crises faced by the American stable currencies, led by the USD Coin-USDC, to highlight the palaces of the organizational framework in the United States. On the other hand, he underlined the Hong Kong license structure and linked his currency to the dollar, since this model can provide a higher long -term degree of reliability.
He said: “The American financial system has witnessed several collapses because it is still immature, and the total level of security has not yet reached.” He added that American hegemony in the initial stages of publishing does not mean continuous excellence, because other currencies can be used in the future as reserves, such as gold, Swiss franc or sterling.
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International trade in global competition
Speaking of international trade, Hao stressed that stable currencies are able to reduce costs and accelerate transactions, in particular for foreign organizations dealing with China. However, he recognized the existence of the tension between these advantages and the requirements of organizational control, affirming: “Stable currencies lead to the decentralization of payment systems, which requires the vigilance of regulators.”
Hao stressed that current stable currency activity does not simply represent a temporary trend, but rather indicates a long -term change in the digital payment system. He added: “The phase of prosperity of stable currencies began and its role in daily financial life will increase over time.”
Although policies related to these currencies are always training worldwide, their integration into official financial systems can put the sovereignty of countries in direct confrontation with publications in the private sector. For Hong Kong, the challenge is to know how to ensure monetary control without hindering the development of the infrastructure of international digital payments.
Current questions
Hao believes that stable currencies can reduce the costs of transactions and speed up their treatment, especially in international transactions that include foreign organs dealing with China.
Hao noted that Gold, Swiss Franc or Pound could play a future role as an active to safeguard stable currencies, rather than the current domination of the US dollar.
Stable currencies lead to the decentralization of payment systems, which raises questions to regulatory authorities on surveillance, compliance and risk management issues that threaten the financial system.
The post is a Chinese analyst expects the market value of the stable currency sector to reach a trillion