Hong Kong Central Bank: Crypto will likely be crucial for the future financial system

Eddie Yue, the chief executive officer of the Hong Kong Monetary Authority (HKMA), has remarked that despite the inadequacies of the cryptocurrency business, it is expected to play a significant role in future financial systems.

According to a July 17 article by Reuters, Yue said at the G20 conference of finance authorities that the technology behind the majority of cryptocurrency projects could be transferred to the broader financial system.

Nonetheless, Yue advocated for the industry to be regulated to minimise dangers such as the recent Terra (LUNA) ecosystem catastrophe, which caused significant losses.

Hong Kong adopting crypto asset advantages

Yue’s views line with the HKMA’s long-standing pro-cryptocurrency stance. The organisation started in January 2022 and is willing to embrace the advantages of financial innovation despite its inherent hazards.

The organisation has lately placed a greater emphasis on stablecoin laws, particularly in light of the Terra ecosystem collapse.

In a recent discussion paper regarding its central bank digital currency (CBDC) for retail use, e-HKD, the HKMA warned that stablecoins might weaken the dollar.

According to the Hong Kong Monetary Authority, if a single stablecoin emerged as more popular, the local currency would be considerably weakened.

In addition, at the G20 session, the governor of the Australian central bank, Philip Lowe, supported privately produced cryptocurrencies only in a well-regulated environment. Lowe suggests that private cryptocurrencies may be superior to CBDCs. Australia and Hong Kong are spearheading the fight towards a standardised crypto regulatory framework.

Also Read: The Crypto Framework Of Paraguay Is Close To Becoming Legislation