Editor's Note: This article comes fromChain News ChainNews (ID: chainnewscom)Editor's Note: This article comes from
Chain News ChainNews (ID: chainnewscom)
, Organized by: Donnager, published with permission.
Shen Nanpeng, a member of the National Committee of the Chinese People's Political Consultative Conference and global executive partner of Sequoia Capital, will submit five proposals in this year's two sessions, the most notable of which is the "Proposal on the Development of Cross-border Digital Stable Coins in Hong Kong". In the proposal, Shen Nanpeng believes that convenient cross-border trade payment and settlement services will promote economic and trade cooperation between China, Japan and South Korea, because trade is a key link in boosting the economy after the epidemic.
image description
Shen Nanpeng, member of the National Committee of the Chinese People's Political Consultative Conference, global executive partner of Sequoia Capital
The specific suggestions put forward are to form a basket of digital stablecoins consisting of RMB, Japanese yen, Korean won and Hong Kong dollar, and first try and apply them in cross-border trade payments in the regulatory sandbox; establish a reserve custody system for electronic wallets to ensure the safety of funds; Promote the cooperation between the mainland and Hong Kong to explore the scenario research, testing, and evaluation of the docking of digital stablecoins and the central bank's digital currency, and promote the central bank's DC/EP to take the lead in realizing cross-border applications in the Bay Area.
In addition to Shen Nanpeng, the representative of the Hong Kong Special Administrative Region, as the proposer, there are many co-signing representatives, including He Zhuguo, Huang Yinghao, Li Guodong, Li Minbin, Li Shan, Lin Jianyue, Tang Yingnian, Wang Yanan, and Zhang Songqiao, who jointly proposed this document.
The "Proposal on the Development of Cross-border Digital Stablecoins in Hong Kong" pointed out that trade is a key part of boosting the economy after the epidemic, especially cross-border trade between Asian regions, which will become an important way out for future economic recovery. With the acceleration of China-Japan-Korea FTA negotiations, convenient cross-border trade payment and settlement services will promote China-Japan-Korea economic and trade cooperation.
As a major trade and financial hub in the region, Hong Kong can leverage its advantages of being backed by the motherland, based in Asia, and serving the world, and actively participate in innovative research and application trials of cross-border trade. Under such circumstances, Mr. Norman Chan, the former president of the Hong Kong Monetary Authority, proposed to establish a China-Japan-Korea-Hong Kong digital stable currency composed of RMB, Japanese Yen, South Korean Won and Hong Kong dollar, and build a cross-border payment settlement network and enterprise e-wallet system.
Regional digital stablecoins have three advantages:
Regional digital stablecoins help reduce exchange rate risk for cross-border trading companies. Cross-border trading companies that settle in foreign currencies need to bear higher foreign exchange costs and exchange rate fluctuation risks. Regional digital stablecoins can provide relatively stable exchange rates, safe and secure pricing units and settlement media, reducing bilateral exchange rate risks. In particular, the addition of the Hong Kong dollar to the digital stable currency can further enhance the exchange rate stability of the digital stable currency by relying on its robust linked exchange rate system, and enhance the applicability and attractiveness of cross-border trading companies.
Regional digital stablecoins help to improve the efficiency of cross-border payment and settlement systems. At present, cross-border payments still have problems such as high handling fees, slow and opaque payment processes, and complicated procedures. The regional digital stablecoin system can introduce emerging technologies such as blockchain and cloud computing, and set up a dedicated e-wallet. Corporate customers can exchange ordinary currency for digital stablecoins into the e-wallet, and direct point-to-point transfers during cross-border payments, which reduces the need for the past. The excessive reliance on the "bridge" cross-border payment and clearing system also makes the fund transfer process more transparent. Considering that about 70% of the global RMB cross-border payment is processed by Hong Kong, it is reasonable and necessary to include Hong Kong in the cross-border payment system of digital stable currency.
Regional digital stable currency can provide a test scenario for the cross-border application of the central bank's DC/EP. Judging from the current research, the digital stable currency is a regional currency composed of the currencies of the four economies of China, Japan, South Korea, and Hong Kong. It is suitable to be initiated and promoted by the private sector, and it should be tried first in a controllable scenario. At the same time, the digital stable currency also takes into account the seamless connection with the digital currency DC/EP to be implemented by the central bank, and also makes an attempt for the implementation of DC/EP in Hong Kong and even its internationalization, and discovers possible problems in the application of DCEP cross-border payment in advance and risk.
The previous "Opinions on Financial Support for the Construction of the Guangdong-Hong Kong-Macao Greater Bay Area" proposed: to build a blockchain trade financing information service platform, participating banks can share and exchange relevant digital cross-border trade information in a safe and reliable manner. It is foreseeable that if the digital stable currency of China, Japan, South Korea and Hong Kong can be implemented, it will improve the anti-risk ability of regional trade under the influence of the international environment, and Hong Kong can also make new contributions to the development of the national digital economy.
Therefore, in the "Proposal on the Development of Cross-border Digital Stable Coins in Hong Kong", the specific suggestions given are:
1. Design the currency value according to the weight, and the regulatory sandbox will be tried first and applied in cross-border trade payment
Appropriate weights are given to RMB, Japanese Yen, Korean Won, and Hong Kong Dollar according to the importance of trade, government financial strength, economic capacity, and reference to the Special Drawing Rights (SDR) to form a basket of digital stablecoins. The weights can be reviewed every few years once;
It is recommended to try out the China-Japan-Korea-Hong Kong digital stablecoin solution in the regulatory sandbox first, and first apply it in cross-border payment to solve the "pain point" of cross-border trade enterprise payment. When the scheme is mature, the scope of application can be expanded.
2. The government-supervised private office promotes its landing in Hong Kong, entrusts reserves to enhance the security of e-wallets
It is suggested that under the guidance and supervision of the central bank and relevant regulatory agencies, the digital stable currency of China, Japan, South Korea and Hong Kong should be launched by the people, and the latest financial technology should be quickly introduced to promote and support the further advancement of this project in Hong Kong, including special research and design;
Establish a reserve fund custody system for electronic wallets. Digital stable coins are supported by equivalent cash as reserve funds. Enterprise customer reserves are kept by qualified custodian institutions to ensure fund security.
