Hong Kong’s Financial Secretary: “Virtual assets are part of financial innovation…they must develop gradually under prudent regulation”

Hong Kong Financial Secretary Paul Chan voiced a positive stance on virtual assets (cryptocurrencies), while stressing the need for a cautious approach under regulation.

On the 10th (Korea time), Chan appeared on Hong Kong public broadcaster RTHK and said, “Virtual assets represent new financial technology.” He added, however, that “insufficient investor protection, anti-money laundering, and financial stability remain areas that still need further development.”

Chan said the Hong Kong government “seeks to bring virtual assets within an appropriate regulatory framework rather than encouraging them indiscriminately,” and noted that it “should strengthen education and the provision of information to raise awareness of risks.”

The program also raised the possibility of introducing a stablecoin linked to gold (a virtual asset whose value is pegged to a fiat currency). A Hong Kong resident who participated suggested that, since gold has historically served as a store of value, a gold-linked stablecoin could be meaningful in the current economic environment.

In response, Chan said, “We plan to develop stablecoins in phases,” adding, “After building the first phase in a stable manner, we could also consider options to link them to gold or other assets.” He cautioned, however, that “we must proceed with great care, taking into account the impact on the market and the financial system.”

Chan said, “Under ‘one country, two systems,’ Hong Kong can serve as a bridge between international financial standards and the strengths of mainland China,” adding, “Going forward, we will pursue institutional development in the virtual asset and fintech sectors as well, grounded in international trust.”