MOORGAN STANLEY: Hong Kong is a buffer zone for capital flow between China and the US, solidifying its role as a bridge between East and West! If Hong Kong does well, China will consider relaxing controls on digital currencies.

  GLOBO, August 5th – As the "Stablecoin Regulation" is rolled out, Hong Kong has become a strategic testing ground for China's stablecoin development. Morgan Stanley's chief economist in China, Xie Ziqiang, states that China definitely hopes to avoid being left behind or excluded from the competition process of digital currencies, but its cautious attitude towards cryptocurrency investments and speculative behavior remains unchanged, so it will "experiment with Hong Kong, if Hong Kong does well, it will consider relaxing controls again." 

  Xie Ziqiang notes that Hong Kong's financial center has been reconsolidated since last August, as the central government recognizes "Hong Kong's natural location is a geographical buffer zone, especially between China and the US for capital flow," and Hong Kong is also a continued supporter of Chinese technological innovation, which can bring good returns to shareholders and the general public. Therefore, from last August onwards, mainland enterprises listed in Hong Kong have been basically allowed to issue shares with no restrictions, regardless of the type of technology or consumer companies that are willing to list in Hong Kong." 

  At the same time, this period coincides with concerns about the depreciation of the US dollar and uncertainty over American policies such as tariffs, causing some funds to flow back from the US. Everyone is paying more attention and willing to participate in high-quality renminbi assets and IPOs in Hong Kong, further strengthening its international financial center status, even if stablecoins cannot immediately create huge new returns in the short term. The traditional banking industry and technology sector will also benefit during the process of developing stablecoins, while the central government allowing Hong Kong to issue stablecoins will help solidify its role as a bridge between East and West. Xie Ziqiang believes that Hong Kong's capital can flow freely, and from a financial ecology perspective, investment products are more comprehensive, with a certain depth in the Hang Seng Index, and there have been some signs of recovery recently, with returns increasing, all of which will help drive the development of stablecoins.