JD.com tests the waters by issuing a stablecoin: will launch a public chain stablecoin pegged to the Hong Kong dollar in Hong Kong
According to the official information from JD Coin Chain Technology (Hong Kong), a subsidiary of JD Technology Group, the JD stablecoin is a stablecoin based on a public chain and pegged 1:1 to the Hong Kong dollar (HKD), which will be issued on a public blockchain.On July 24, it was announced that JD.com will issue a cryptocurrency stablecoin pegged 1:1 to the Hong Kong dollar in Hong Kong.
According to information from JD Coin Chain Technology (Hong Kong), a subsidiary of JD Technology Group, the JD stablecoin is a stablecoin based on a public blockchain and pegged 1:1 to the Hong Kong dollar (HKD). It will be issued on a public blockchain and aims to provide efficient, economical, and secure payment solutions for global enterprises and individuals.
Each JD stablecoin can be redeemed at a 1:1 ratio, with reserves consisting of highly liquid and trustworthy assets, securely stored in independent accounts at licensed financial institutions. The integrity of the reserves is strictly verified through regular disclosures and audit reports.
It is understood that JD Coin Chain Technology (Hong Kong) is a subsidiary of JD Technology Group and the only potential issuer of stablecoins for JD. The company's CEO, Liu Peng, currently serves as the Vice President of JD Technology.
JD Coin Chain Technology was registered in Hong Kong in March 2024, with its main business including digital currency payment systems and blockchain infrastructure development, indicating its establishment to participate in the Hong Kong cryptocurrency stablecoin business.
Regulatory Aspects of Stablecoins in Hong Kong
Recently, the Hong Kong Monetary Authority updated its website to include JD Coin Chain Technology (Hong Kong) Limited in the list of stablecoin issuer "sandbox" participants, along with Round Coin Innovation Technology Limited; Standard Chartered Bank (Hong Kong) Limited, and Anqi Group Limited, Hong Kong Telecommunications (HKT) Limited.
The sandbox is an experimental project by the Hong Kong Monetary Authority to test cryptocurrency stablecoins. Through the sandbox, the Monetary Authority allows institutions intending to issue stablecoins in Hong Kong to test their operational plans and engage in two-way communication regarding proposed regulatory requirements to develop a purpose-driven and risk-based regulatory framework.
JD Coin Chain Technology has obtained licenses from the Hong Kong Securities and Futures Commission (SFC) for Type 1 (Securities Trading), Type 4 (Advising on Securities), and Type 9 (Asset Management). However, the approval of the JD stablecoin at this stage does not mean it has been recognized by the Hong Kong Monetary Authority or considered to have obtained a stablecoin issuance license; formal issuance may still take some time.
Although this is not a formal approval from the Hong Kong government for cryptocurrency stablecoin business, this initiative has set a precedent, making Hong Kong the first region in the world to support banks or financial institutions in issuing cryptocurrency stablecoins.
Scholars Previously Proposed a New Path for Stablecoin Development in Hong Kong
In July 2023, Wang Yang, Vice President of the Hong Kong University of Science and Technology and Chief Scientific Advisor of the Hong Kong Web3.0 Association, angel investor Cai Wensheng, founder of Web3.0 technology company Block City Lei Zhibin, and PhD student Wen Yizhou from the Hong Kong University of Science and Technology published a policy proposal in the Ta Kung Pao, suggesting that Hong Kong issue a Hong Kong dollar stablecoin backed by foreign exchange reserves.
The article pointed out that stablecoins, as a bridge between traditional finance and the digital economy, have become an important topic in Hong Kong's advancement of digital asset development. The role of stablecoins in the digital financial ecosystem cannot be overlooked. Issuing a stablecoin backed by its own currency would not only help consolidate Hong Kong's leadership in blockchain but also promote the advancement of digital Hong Kong dollars, enhance transaction efficiency, reduce transaction costs, improve the current payment system, and further strengthen Hong Kong's fintech capabilities.
In addition, the Hong Kong dollar stablecoin could enhance the efficiency and inclusiveness of Hong Kong's financial system. Its stability, free convertibility, high security, high openness, and cross-border liquidity will support broader financial innovation. The launch of the Hong Kong dollar stablecoin will undoubtedly inject new momentum into Hong Kong's economy and help enhance its competitiveness in the digital economy era.
