Hong Kong balancing financial security, innovation as nation’s ‘firewall’: Paul Chan Hong Kong has struck a balance between financial security and innovation in its strategic roles as a “testing ground” and “firewall” for the nation’s reform and opening up, the city’s finance chief has said. Financial Secretary Paul Chan Mo-po said on Sunday that security was core to the goal of achieving high-quality development as geopolitical tensions created risks in global financial markets and energy supplies. As Hong Kong rolled out the first batch of stablecoin licences last week, the city would also speed up its shift to green energies, he pledged. “In the nation’s pursuit of high-quality development, Hong Kong has long served as a ‘testing ground’ and ‘firewall’ for reform and opening up, assisting the mainland in deepening capital market reforms and preventing the transmission of overseas risks to the mainland,” Chan said in his weekly blog. “Only through innovation within a safe and controllable risk framework can we build a more resilient, dynamic and competitive financial system, which enables us to better withstand external shocks and continue development.” Ahead of National Security Education Day on Wednesday, Chan pointed out that one of the principles of China’s 15th five-year blueprint was coordinated development and security. The concept formed a key part of a white paper Beijing released in February about Hong Kong’s role in safeguarding national security under the “one country, two systems” governing principle. Chan said Hong Kong must continue to balance development and security while remaining open, in addition to encouraging and promoting innovation, given its positioning as a free and open global centre of finance, trade, shipping and innovation. “We also focus on preventing risks when there are signs of trouble,” he said. Chan said the city must “firmly” establish a macro view of national security and comprehensively enhance its capabilities in risk prevention and emergency response. He added that the concept of national security was intertwined with various fields, such as finance, energy, technology, food and overseas interests. “At the same time, we also highly value the importance of innovation,” Chan said, citing the city’s stablecoin issuer licences as a prime example. The Hong Kong Monetary Authority, the city’s de facto central bank, issued licences on Friday to HSBC and a Standard Chartered bank-led group, eight months after the city’s Stablecoin Ordinance took effect. The Standard Chartered-led joint venture, called Anchorpoint, includes local game software and venture capital firm Animoca Brands, and Richard Li Tzar-kai’s Hong Kong Telecommunications. Credit rating agency S&P Global Ratings said that while the two licensees would have a first-mover advantage in the city’s goal to be a digital asset hub, the limited number of licences issued in the first batch was a conservative approach by the authority. “The first licences issued involve a bank and a bank-led joint venture. This signals that the regulator will take a conservative approach, with banks, rather than less-regulated types of players, in the forefront of this market development,” it said. China in February banned onshore tokenisation of real-world assets, tightened scrutiny of related offshore activities and forbade the issuance of any yuan-pegged offshore stablecoins without authorisation. The two Hong Kong stablecoin issuers will have to seek Beijing’s approval before issuing any yuan-pegged stablecoins. “Our principle regarding stablecoins is that they have considerable potential to address pain points in economic activities, particularly cross-border transactions and payments, while the bottom lines of financial stability, anti-money-laundering, and protection of users and consumers must be upheld,” Chan said. https://www.scmp.com/news/hong-kong/hong-kong-economy/article/3349786/hong-kong-balancing-financial-security-innovation-nations-firewall-paul-chan?pgtype=live (ICE HONG KONG)

Fonte notizia: South China Morning Post