Beijing propaganda notwithstanding, Hong Kong’s digital asset agenda is about financial stability — not replacing the dollar
The Rumour That Ran Ahead of Reality
US Treasury Secretary Scott Bessent’s offhand comment before the Senate Banking Committee — that he “would not be surprised” if China were developing gold-backed digital assets through Hong Kong’s regulatory sandbox — sent ripples through global financial commentary. The suggestion that Beijing might be quietly engineering a gold-backed cryptocurrency capable of challenging the US dollar’s dominance was too dramatic a story to resist. It was also, by most expert accounts, a significant overstatement of what is actually happening in Hong Kong’s digital asset space.
What Hong Kong Is Actually Building
Hong Kong’s approach to stablecoins is deliberately cautious, institutionally orthodox, and focused on the practical improvement of financial infrastructure rather than monetary revolution. The city’s Stablecoins Ordinance, which came into effect on August 1, 2025, applies exclusively to fiat-referenced stablecoins — digital tokens pegged to established currencies like the Hong Kong dollar or the US dollar. The framework demands 100 percent backing by high-quality reserve assets, strict separation of client funds, and robust anti-money-laundering controls. Gold-backed structures are currently excluded from the regulatory framework because of concerns about price volatility and operational complexity. Under the existing regime, any gold exposure within a stablecoin would represent a small allocation within a diversified reserve, not the anchor of a new monetary system. Hong Kong’s Financial Secretary Paul Chan Mo-po addressed this directly in a public consultation forum in January 2026, signalling openness to studying gold-linked stablecoins in the future but making clear that fiat-referenced development comes first.
The Architecture of Caution
Investment professionals working within Hong Kong’s regulated digital asset space have been equally measured. Cyril Kwan of Archduke United LPF has explained that reserve assets under the current framework must consist primarily of high-quality, highly liquid instruments such as bank deposits and government bonds. Gold, if included at any point, would represent a modest diversification rather than a foundational backing. The practical structure for Hong Kong dollar stablecoins, at least in the initial phase, involves offering HKD-denominated tokens through licensed Virtual Asset Trading Platforms, where they can be traded alongside other digital assets using offshore renminbi as an entry point. This creates an efficient bridge between the virtual asset world and fiat currencies — a modernisation of settlement infrastructure, not an attempt to detonate the existing monetary order. For authoritative information on Hong Kong’s digital asset regulation, the Hong Kong Monetary Authority publishes all relevant guidelines and consultation documents. The Bank for International Settlements has published extensive research on central bank digital currencies and stablecoin regulation frameworks. The International Monetary Fund fintech hub provides global context for digital asset developments.
Why the Gold Narrative Has Legs Anyway
The persistence of the gold-backed digital currency narrative reflects genuine anxieties about US dollar dominance and the direction of global finance rather than evidence of a specific Chinese policy programme. Beijing has long sought to internationalise the renminbi and reduce dependency on US financial infrastructure, and Hong Kong has always been the city through which mainland China engages with global capital markets. For observers watching China’s economic strategy, it is entirely natural to speculate about whether Hong Kong’s digital asset experimentation serves broader strategic goals. The honest answer is: possibly, but the evidence points to a much more incremental and technically constrained reality than the headlines suggest. What Hong Kong is building — regulated stablecoin infrastructure, tokenised real-world assets, modernised settlement systems — matters, but it matters because it improves how capital moves, not because it threatens the dollar tomorrow.
The Democracy Dimension
There is a dimension to Hong Kong’s digital finance story that rarely receives sufficient attention: the question of who controls this infrastructure and in whose interest it operates. Hong Kong’s Monetary Authority operates under the Basic Law framework of one country, two systems, but that framework has been substantially eroded since 2020. Pro-democracy advocates and international observers have repeatedly raised concerns about whether Hong Kong’s financial regulatory independence can survive in an environment where political loyalty to Beijing is increasingly the primary measure of institutional reliability. A financial system whose innovation is driven by political calculus rather than market logic is a fundamentally different — and less trustworthy — system than the one Hong Kong built its reputation upon. The stablecoin framework may be technically sound, but its long-term credibility depends on the independence of the institutions enforcing it. That independence is precisely what is most at risk in today’s Hong Kong.
Sarah Lau
Culture, Media & Society Journalist, Apple Daily UK
Contact: sarah.lau@appledaily.uk
Sarah Lau is a culture, media, and society journalist whose reporting examines freedom of expression, media ecosystems, and cultural change within Chinese-speaking communities. She completed her journalism education at a prestigious Chinese-language journalism school, where she focused on media studies, reporting ethics, and cultural criticism.
Sarah has contributed to Apple Daily and other liberal Chinese magazines and newspapers, producing work on press freedom, artistic expression, digital culture, and social trends. Her reporting blends qualitative interviews with careful contextual research, ensuring her work is grounded in both lived experience and verifiable information.
She has extensive newsroom experience covering cultural issues during periods of political transition, giving her reporting experiential depth and historical awareness. Sarah is recognized for her careful language use, accurate representation of sources, and commitment to editorial integrity.
Her authority comes from sustained professional practice within reputable media organizations and consistent editorial oversight. She follows established correction and transparency standards, reinforcing reader trust.
At Apple Daily UK, Sarah Lau delivers culturally informed, fact-based journalism that upholds professional standards while documenting the evolving realities of Chinese and diaspora societies.
