The Hong Kong General Chamber of Commerce (HKGCC) has urged policymakers to consider permitting the issuance of stablecoins linked to the Chinese yuan.

The Hong Kong General Chamber of Commerce (HKGCC) has urged policymakers to consider permitting the issuance of stablecoins linked to the Chinese yuan. In a statement issued on Tuesday, the influential business organization stressed the importance of retaining and attracting talent and businesses in Hong Kong.

They proposed exploring a “Virtual Asset Connect Scheme” to achieve this goal. The HKGCC recommended that the government allow the issuance of yuan-linked stablecoins or stablecoins backed by a basket of various fiat currencies, including the yuan, Hong Kong dollar, or U.S. dollar. While specific details about the proposed Virtual Asset Connect Scheme were not provided, the organization suggested an initial daily limit of around HK$20 billion ($2.5 billion).

These recommendations precede the upcoming budget address by the Financial Secretary later this month, where enhancing Hong Kong’s overall operating environment and addressing acute manpower shortages are key objectives. In December, the Hong Kong Monetary Authority (HKMA) released a joint consultation paper with the Financial Services and the Treasury Bureau, indicating that stablecoin issuers would need licenses if their stablecoins referenced the value of one or more fiat currencies in Hong Kong.

Christopher Hui, the Secretary for Financial Services and the Treasury, recently announced plans to introduce a sandbox for exploring stablecoin issuance in collaboration with key industry players. Likewise, Eddie Yue, the Chief Executive of the HKMA, emphasized the role of stablecoins as a bridge between traditional finance and the virtual asset market.

He highlighted the importance of stability in stablecoins, especially if they become a preferred payment option for the general public. In other developments, experts anticipate that Hong Kong will approve spot crypto exchange-traded funds (ETFs) by the middle of this year. Additionally, Hong Kong is set to host The Bitcoin Conference this year, as announced by local lawmaker Johnny Ng.