Hong Kong authorities are exploring new concepts for a central bank digital currency (CDBC), and are now proposing to issue a CBDC in the form of a government-backed stablecoin.

One of the members of the Legislative Council of the Hong Kong Special Administrative Region, Wu Jiezhuang, believes that the transformation of the digital Hong Kong dollar (e-HKD) into a stable currency will be beneficial for the widespread implementation of emerging technologies such as Web3.

According to what Wu Jiezhuang stated in an interview with China Blockchain News on Jan. 5, the ability to convert e-HKD into a stablecoin has the ability to effectively manage the dangers associated with virtual assets on Web3. China Blockchain News conducted the interview.

The congressman believes that such a setup for Hong Kong’s digital currency would make it easier for the government to gain investor confidence in the Web3 business and would also better protect consumers from issues such as cyber-attacks.

The lawmaker also noted that the stablecoin could be connected to decentralized finance (DeFi) for better access in Web3 ecosystems. He claimed that Wu Jiezhuang, in addition to his role as a member of the Hong Kong Legislative Council, is also a founding member of G-Rocket, a start-up accelerator that aims to attract 1,000 Web3 companies to set up shop in the city-state. for the next three years. G-mission Rocket’s is to attract 1,000

G-Rocket was established in 2016 by him and Jonny Ng Kit-Chong, who is a member of the Hong Kong Legislative Council.

Wu Jiezhuang is the latest government official to call attention to the potential upside that could result from the CBDC and DeFi merger.

Previously, Mikkel Morch, CEO of digital asset hedge firm ARK36, proposed that a CBDC need not be a rival to a private or decentralized cryptocurrency. He made this claim in a previous article.

At the same time, he noted that a CBDC has the ability to reduce the importance of the role played by private stablecoins.