Standard Chartered CEO Sees Hong Kong Stablecoin as Pivotal for International Trade Settlement

What to know:

• Standard Chartered CEO Bill Winters highlighted Hong Kong's advancements in tokenized money and stablecoins as pivotal for future digital trade settlement.
• Winters emphasized the potential of Hong Kong's tokenized deposits and HKD-backed stablecoin to revolutionize cross-border commerce.
• The Securities and Futures Commission has announced new regulations that will allow Hong Kong exchanges to access global liquidity, aiming to enhance market efficiency and price discovery.

Standard Chartered CEO Bill Winters said on Monday that Hong Kong's push into tokenized money and stablecoins could lay the foundation for a new era of digital trade settlement.

Speaking at Hong Kong FinTech Week, Winters pointed to ongoing pilots in tokenized deposits and the creation of a Hong Kong-dollar-backed stablecoin as potential breakthroughs for cross-border commerce.

“I wouldn’t say that we’ve fully captured the digitized nature of those flows as yet, but we will,” Winters said. “Having innovations like the tokenization of deposits being led in Hong Kong, the establishment of Hong Kong dollar stable coins … becomes a really interesting currency of exchange, or medium of exchange for international trade.”

He added that Hong Kong’s “pilots in digital assets … as mechanisms for trade globally … will smooth the evolution into the new international trading order on wholly digital terms.”

His remarks come almost a year after Standard Chartered’s Hong Kong unit, Animoca Brands and HKT announced a joint venture to apply for a license from the Hong Kong Monetary Authority to issue an HKD-backed stablecoin under the city’s new regulatory regime. The trio is among the five entities participating in the HKMA’s stablecoin issuer sandbox launched last year.

Earlier today, during the Hong Kong Fintech Week, the Securities and Futures Commission (SFC), the city's markets regulator, announced that it would allow locally-licensed exchanges to access global liquidity via shared order books.

The change, detailed in a new circular, allows Hong Kong platforms to integrate global liquidity pools under what the SFC refers to as its ASPIRe roadmap for digital assets.

By permitting “shared order books,” the SFC aims to narrow price spreads, enhance market efficiency, and improve price discovery, although it warned of higher operational and settlement risks.

Platforms must maintain pre-funding, delivery-versus-payment settlement, unified market surveillance across jurisdictions, and compensation reserves to protect client assets, the SFC said in its circular.