Asia Morning Briefing: Hong Kong FinTech Week Highlights Stablecoins Over Central Bank Digital Currencies

Stablecoins Dominate Hong Kong FinTech Week as CBDCs Fade

Once positioned as the future of digital money, central bank digital currencies (CBDCs) barely registered at this year’s Hong Kong FinTech Week. Instead, market-driven stablecoins took center stage, while Brazil’s Drex project pause highlighted how even early CBDC adopters are reconsidering the model.

Six years after China launched its eCNY, the focus has shifted. At FinTech Week, banks, fintechs, and regulators emphasized HKD-backed stablecoins and tokenized deposits rather than state-issued digital cash. Brazil’s Drex pause underscored the slowing momentum for central banks’ retail ambitions, leaving private issuers to build infrastructure once intended for CBDCs.

CBDCs were often motivated more by fear than innovation. Facebook’s 2019 Libra project, proposing a global digital currency backed by sovereign assets, prompted central banks to act, worried a private company could control major payment rails. But Libra’s collapse left CBDCs chasing an unclear purpose, evolving into slow, bureaucratic experiments that the faster, more adaptable stablecoin market has already surpassed.

According to the Atlantic Council, 137 countries and currency unions have CBDC initiatives covering nearly all global GDP. Yet only a handful — the Bahamas’ Sand Dollar, Jamaica’s Jam-Dex, and Nigeria’s eNaira — are fully operational, with the largest economies still stuck in pilots, committees, and technical studies.

Meanwhile, private-sector innovation is accelerating. “Pretty much all transactions will settle on blockchains eventually, and all money will be digital,” said Standard Chartered CEO Bill Winters, emphasizing stablecoins as the main driver of the next phase of digital money.

Market Snapshot

• Bitcoin (BTC): Around $105,930, steady over 24 hours as the market consolidates after recent volatility.
• Ethereum (ETH): Near $3,578, slightly down as traders rotate into Bitcoin and unwind leveraged DeFi positions, though staking demand provides support.
• Gold: Up over 2% to about $4,085 per ounce, boosted by soft U.S. economic data and optimism over a December Fed rate cut.
• Nikkei 225: Japan’s Nikkei 225 rose nearly 1%, tracking Wall Street gains driven by renewed AI optimism and hopes of a government shutdown resolution.

The message is clear: CBDCs remain largely theoretical, while stablecoins are increasingly shaping the real-world future of digital payments and finance.

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