Core Viewpoint - Hong Kong is adapting to changes in the global landscape of digital finance and the internationalization of the Renminbi (RMB) through the implementation of the Stablecoin Regulation, aiming to provide a Chinese solution to the digital finance challenge [1][9]. Summary by Sections Introduction of Stablecoin Regulation - The Stablecoin Regulation in Hong Kong officially took effect on May 30, following the U.S. passing the GENIUS Act on May 20, indicating a strategic response to the reshaping of digital currency regulations amid international competition [2]. Potential of CNH Stablecoin - Although the CNH stablecoin has not yet launched, the enactment of the Stablecoin Regulation opens up possibilities for its implementation, potentially establishing a new digital path for RMB internationalization and becoming a key component in the reconstruction of cross-border payment systems [3][5]. Historical Context and Regulatory Framework - The successful pilot of personal RMB business in 2003 laid the groundwork for RMB cross-border trade settlement in 2009. The current regulatory framework, characterized by a "regulatory closed loop + market-driven transmission" mechanism, may serve as a reference for the stablecoin experiment [5][6]. Policy Signals and Challenges - Recent statements from the People's Bank of China emphasize the orderly promotion of RMB international use, addressing challenges such as cross-border payment inefficiencies and fragmented offshore market liquidity, with stablecoins potentially offering solutions [6]. Implementation Phases for CNH Stablecoin - The implementation of the CNH stablecoin can be divided into three phases: sandbox testing (2025-2026), regional expansion (2026-2027), and global promotion (from 2028), with the aim of establishing it as a pricing tool for regional commodities [7][8]. Strategic Importance of CNH Stablecoin - If successful, the CNH stablecoin could not only serve as a new channel for RMB internationalization but also represent a digital model of China's institutional openness, positioning China advantageously in the restructuring of global monetary order [9].

Core Viewpoint - The implementation of the Hong Kong Stablecoin Regulation and the recent passage of the GENIUS Act in the U.S. signify a strategic shift in the global digital currency landscape, with Hong Kong potentially leading the way in the internationalization of the Renminbi (CNH) through stablecoins [1][2][3] Group 1: Regulatory Developments - The Hong Kong Stablecoin Regulation officially took effect on May 30, 2023, creating a legal framework for stablecoins amid a global trend towards structured digital asset regulation [1] - The regulation allows for the inclusion of non-Hong Kong dollar fiat currencies as anchor currencies, providing policy space for the potential issuance of CNH stablecoins [2][3] Group 2: Historical Context and Lessons - The successful pilot of personal Renminbi business in Hong Kong in 2003 laid the groundwork for the 2009 cross-border trade settlement, highlighting the importance of a regulatory framework combined with market-driven mechanisms [2] - The experience from the past suggests that a layered regulatory approach could be beneficial for the current stablecoin trials, ensuring both market autonomy and system security [2] Group 3: Potential Benefits of CNH Stablecoin - The CNH stablecoin could enhance cross-border payment efficiency, reducing settlement costs to one-tenth of traditional systems and enabling real-time transactions, particularly beneficial for small and medium-sized trade under the Belt and Road Initiative [3] - It may also improve liquidity by utilizing smart contracts for automatic redemption, thereby increasing the utilization rate of the offshore Renminbi fund pool [3] Group 4: Implementation Phases - The implementation of the CNH stablecoin is proposed to occur in three phases: sandbox trials from 2025-2026, regional expansion from 2026-2027, and global promotion starting in 2028 [4] - The success of these phases will depend on replicating the collaborative regulatory and market mechanisms from previous experiences and seizing strategic opportunities in rule-making and financial infrastructure development [4] Group 5: Strategic Implications - If successful, the CNH stablecoin could serve as a new channel for Renminbi internationalization and a digital paradigm for China's institutional openness, positioning China advantageously in the restructuring of global monetary order [5] - The evolution from personal Renminbi accounts to smart contract-based stablecoins reflects the changing landscape of digital finance and the ongoing adaptation of Renminbi internationalization strategies [5]