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Hong Kong will allow registration and purchase of tokenized financial products on regulated stablecoin applications, and mainland Chinese residents can legally hold public chain wallets and use stablecoins for transactions for the first time through this pilot. Hong Kong pilot stablecoin application: Hong Kong's trial allows anonymous registration on regulated stablecoin applications and the purchase of tokenized financial products using stablecoins. Application of RealDID system: Hong Kong's pilot will use China's real-name decentralized ID system for anonymous registration, allowing users to remain anonymous to companies and platforms while meeting real-name compliance requirements under Chinese law. China's policy on blockchain: Despite its strict stance on residents trading cryptocurrencies, China is still investing heavily in blockchain technology, with its blockchain projects often being licensed and NFT projects focused on collections.
The Hong Kong trial will allow registration and purchase of tokenized financial products on a regulated stablecoin app.
Layer-one blockchain Flare and decentralized cloud infrastructure company Red Date Technology have announced two trials that will allow mainland Chinese residents to purchase stablecoins issued by Hong Kong-based virtual asset firm IDA.
The first trial will allow anonymous registration on a regulated stablecoin application, and another will facilitate the purchase of tokenized financial products using stablecoins.
The two companies said in a statement: "In anticipation of Hong Kong's upcoming announcement of new stablecoin regulations that will allow the use of digital currencies on public blockchains, the launch of this KYC solution pilot gives mainland Chinese residents their first opportunity to legally hold public chain wallets and transact with stablecoins, such as IDA's fiat-pegged Hong Kong dollar stablecoin HKDA. This project marks a possible first step in China's long-term approach to integrating blockchain technology."
China has a strict stance on residents trading cryptocurrencies, but the country is still investing heavily in blockchain technology. Despite the popularity of cryptocurrency trading, state-backed projects tend to focus more on B2B and enterprise use cases. Blockchains tend to be permissioned rather than permissionless, and NFT projects, including those released by local museums, have been warned that their purpose should be collection, not speculation.
The Hong Kong trial will use China’s Real-Name Decentralized ID System (RealDID) for anonymous registration. The blockchain-based system was launched in China in December last year and is operated by the Blockchain Service Network backed by Red Date Technology and the First Research Institute of the Ministry of Public Security.
Under Chinese law, users on digital service platforms must register their real names. But by using RealDID, they can remain anonymous to companies and platforms while meeting real-name compliance requirements under Chinese law. In Hong Kong, they will be able to use stablecoins and other token-based financial products without having to submit passports or bank statements.
At present, it seems that major stablecoins such as Tether and Circle’s USD stablecoin will not be launched. $ACA
