The policy proposal encourages the Hong Kong government to issue its own stablecoin, HKDG, backed by its foreign exchange reserves, in order to compete with existing stablecoins like USDT and USDC. The authors argue that a government-backed stablecoin would enhance financial inclusiveness, transaction efficiency, and fintech capabilities while challenging the dominance of the US Dollar in the crypto ecosystem. They acknowledge potential risks but believe that government regulation and blockchain technology can mitigate them. The proposal aligns with Hong Kong's aim to become a global hub for the crypto industry and capitalize on its substantial foreign exchange reserves.

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