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Hong Kong Firm Launches Stablecoin, Defying China Ban

A Hong Kong-based blockchain investment firm is planning to launch a new stablecoin backed by the Japanese yen. The company, Grandshores Technology Group, will launch the funding round in late 2018 or early 2019.

Despite the optimism of the group’s founding partner Yongii Yao, there is concern among possible investors due to China’s continued scathing stance on cryptocurrency in general and its current ban on ICOs on the Chinese mainland. Hong Kong officially remains a special administrative region of the People’s Republic of China.

Currently, Hong Kong is going ahead with a push to promote blockchain in the territory. A “talent list” was recently issued by The Government of the Hong Kong Special Administrative Region in which it states that it wants “quality people from around the world in a more effective and focused manner to support Hong Kong’s development as a high value-added and diversified economy”. Among the 11 professions on the new list, those with DLT skills were cited.

This isn’t really surprising given a new focus on innovation and technology China’s Administrative Region, given a recent push that has seen the promotion of blockchain in the public arena through generous grants through its local universities of USD 20 million for blockchain and fintech research.

Yao’s optimism leads him to feel that the stablecoins will have mileage on release. He argues:

“We believe cryptocurrency traders and exchanges will be potential takers of these stablecoins… We are entering the next stage of blockchain evolution, a stage which is akin to when computer operating system was transiting from MS-DOS to MS-Windows.”

This is the second recent statement concerning the release of a stablecoin this month after New York state in the US approved two new US dollar-linked stablecoins. Two companies, Gemini Trust Company and the Paxos Trust Company, are the first stablecoin providers to receive the go-ahead to list on exchanges in New York state. The Gemini Dollar, launched by the Winklevoss twins, will allow users a one-to-one exchange on the US dollar on the Ethereum blockchain.

There appears to be a degree of mixed feeling in the industry concerning stablecoins, illustrated by recent remarks by Berkeley professor of economics Barry Eichengreen who suggests that stablecoins, seen by some as highly attractive for investment due to their being pegged to the US dollar, aren’t so stable as the name suggests.

 

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