Hong Kong authorities are considering issuing a central bank digital currency (CBDC) in the form of a stablecoin backed by the government.

Wu Jiezhuang, a member of the Legislative Council of the Hong Kong Special Administrative Region, believes that transforming the Hong Kong digital dollar (e-HKD) into a stablecoin would provide benefits for the adoption of new technologies like Web3.

The stablecoin could be connected to decentralized finance (DeFi) for better access in Web3 ecosystems, Wu Jiezhuang said.

He added that the design of e-HKD as a stablecoin would help authorities gain investors’ trust in the Web3 industry and better protect users from issues like hacks.

Wu Jiezhuang is also a founding member of G-Rocket, a startup accelerator that aims to attract 1,000 Web3 businesses to Hong Kong over the next three years.