Bitcoin has lost touch with the US stock market, its exchange rate is now changing without reference to the dynamics of the main stock indices, writes Coindesk, citing a study by Block Scholes analysts. As the experts specified, the moving average of the correlation coefficient of BTC with the traditional US stock market indices (S&P500 and Nasdaq) fell almost to zero in 90 days. The reason was that both indices were able to win back losses from last year’s bearish cycle. “Correlation is now at its lowest level recorded since July 2021, when BTC was between two peaks in April and November,” Block Scholes noted. Crypto traders who are focused on traditional market sentiment and macroeconomic events may find that their predictions do not come true, the publication emphasizes.
On the evening of July 3, the price of bitcoin exceeded $31.3 thousand for the first time since June 1, 2022. The asset has updated a maximum for 13 months at around $31.38 thousand. BTC has risen in price by 1.1% per day. At 9:30 a.m. Moscow time, bitcoin was trading at $31,000. The bitcoin rate began to rise after it became known that the NASDAQ exchange re-applied to register a spot bitcoin ETF from BlackRock. In the corrected documents, the Coinbase crypto exchange is listed as a partner of the investment company.
Hong Kong wants to issue a Hong Kong dollar stablecoin to compete with Tether and USDC. Cryptocurrency and blockchain advocates have written a proclamation urging the Hong Kong government to issue a stablecoin pegged to the Hong Kong dollar, which could challenge the dominance of Tether and USD Coin. According to an English translation of a July 3 report provided by Chinese crypto reporter Colin Wu, four individuals associated with financial innovation proposed the government to issue an HKDG (government Hong Kong dollar) stablecoin to support its efforts to lead the digital economy. Wang Yang, Vice President for Institutional Development, Hong Kong University of Science and Technology; Cai Wensheng, founder of Meitu, a smartphone software company; Lei Zhibin, Honorary Chairman of the Hong Kong Blockchain Association; and doctoral student Wen Yizhou co-authored the article.
“Issuing a stablecoin pegged to the Hong Kong dollar not only helps to strengthen Hong Kong’s leadership in the blockchain sector, but also promotes the progress of the digital Hong Kong dollar by improving transaction efficiency, lowering transaction costs, improving existing payment systems, and helping to further strengthen Hong Kong’s influence in the field of financial technology. “, the report says. “Moreover, a Hong Kong dollar stablecoin can enhance the efficiency and inclusiveness of Hong Kong’s financial system. Its stability, freedom of exchange, high security, openness and cross-border liquidity can support a wider range of financial innovation.”
Yang, Wensheng, Zhibing and Yizhou argue that the government’s plan to encourage private institutions to issue stablecoins pegged to the Hong Kong dollar was “too conservative” compared to its intention to promote cryptocurrencies and blockchain.The report claims that Hong Kong’s foreign exchange reserves are as of as of March 2023 were approximately $430 billion, “significantly more than” the combined market capitalization of Tether (USDT) and USD Coin (USDC) at approximately $120 billion. “HKDG, backed by the government of the Special Administrative Region (SAR), will have a higher level of credibility and lower risk, especially given that the credibility of the USDT remains in question and the USDC has recently experienced major deviations from the peg.”
Among the benefits that the authors of the report believe could come from launching the HKDG are combating the dominance of the US dollar, providing additional liquidity for government projects, and making it easier for officials to monitor and assess risks. However, the report cites potential risks, including legal and regulatory issues, international disputes over transactions potentially involving illegal funding, and hacks. “The risks associated with the public HKDG are significantly lower than those of the Hong Kong dollar stablecoin that could be issued by private institutions,” the report said. Recall that at the end of May, the Chinese police detained the team of the Trust Reserve company, the developers of the stablecoins CNHC and HKDC. Employees of the company stopped communicating on May 29, later there was information that they were detained, their families were notified by the police. Trust Reserve (former CNHC Group) issued the CNHC stablecoin, pegged to the offshore yuan (CNH), and the HKDC stablecoin, pegged to the Hong Kong dollar.
In June, the Hong Kong government announced the formation of a working group to oversee the development of Web3. As of March, more than 80 digital asset or blockchain firms were reportedly considering a presence in Hong Kong, in addition to the roughly 800 fintech companies already in the Special Administrative Region.
