The ‘quake’ is coming – but who’s prepared?
What a relief that the ‘Megaquake’ in the Nankai Trough, predicted for July 5th, failed to show up. And just as well. The Japanese Government had forecast a possible death toll of 300 million people and damage of up to US$2 trillion.
Governments throughout Asia Pacific had been advised to raise public awareness, to reinforce building structures, and to protect critical infrastructure.
Some took this advice more seriously than others. In Hong Kong, many people cancelled their trips to Japan. Indeed, the number of tourists from HK fell 11.2% in May. On the other hand, tourists from Mainland China increased by 44.8%.
As always, so much depends on their source of news.
Which raises the question of how much is known about another ‘seismic event’ that will definitely happen. On August 1st 2025, Hong Kong will officially have a regulatory framework for issuing stablecoins. The city will become the leading hub in Asia Pacific for digital asset development.
As with the Nankai Trough, predictions about the impact vary considerably.
The ‘quake’ is coming – but who’s prepared?
On the one hand, there’s the belief that this will completely disrupt the mainstream financial system. Cross border payments will be enhanced, foreign exchange markets will become more efficient – including the likelihood of the RMB being internationalised – and it will hasten the development of Web3.0.
Also, given the fact the stablecoins are not currently permitted in Mainland China, we can expect to see a rush of mainland businesses either setting up offices in Hong Kong or expanding their operations in the city.
On the other hand, the Chief Executive of the Hong Kong Monetary Authority, Eddie Yue, has urged caution. He has publicly warned that the rules and regulations will be stringent, and that ‘we will at most grant a handful of stablecoin issuer licences’.
Whilst such a statement was probably intended to calm the waters, it’s likely to have the opposite effect. The greater the rarity, the greater the value, the greater the interest. (That’s why Black Ivory Coffee sells at US$50 per cup!)
And interest there is. Investor demand is strong. Goldstream Investment, for example, saw their share price spike more than 500% in early July. This followed their announcement of collaboration with AnchorX, a digital currency firm, to explore the issuance of offshore RMB stablecoins.
Unlike the Nankai Trough, we have a definite date: August 1st.
But the same questions arise.
For those in Finance, at least. Have you raised public awareness (both internally and with clients), have you reinforced your structures, are you protecting your critical infrastructure?
Time will tell.
Tales from the Media Room by Rebekah James
Anyone for tennis?
When you think of a quintessentially British Summer what springs to mind? Ascot, strawberries and cream, Pimms and picnics on riverbanks and parks and of course tennis!
Wimbledon is one of the oldest and most prestigious tennis tournaments in the world. The event combines style, sport and history making it the ultimate 'see and be seen' destination in London.
However, I for one thought that the media's obsession with one particular royal far outweighed the gravitas of the tournament itself this year.
Read: Anyone for Tennis?
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