Hong Kong authorities will strive to create a conducive environment for the wide-ranging application of stablecoins in a bid to provide practical help for businesses to resolve cross-border payment issues, the city’s finance chief has said.

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Financial Secretary Paul Chan Mo-po on Sunday reaffirmed the government’s efforts in applying fintech to resolve long-standing “pain points” such as slow and costly cross-border payments, highlighting new stablecoin laws set to take effect on August 1.

“Stablecoins can offer a cost-effective alternative outside the traditional financial system and have the potential to revolutionise payment and capital market activities, including cross-border payments,” Chan said in his weekly blog.

“The government and financial regulators will strive to foster a favourable market environment … to encourage issuers to expand stablecoin applications into various scenarios. We aim to help resolve practical pain points for businesses and everyday citizens alike.”

Stablecoins are a type of cryptocurrency backed by a reference asset, usually fiat currencies such as the US dollar and the Hong Kong dollar.

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Chan made the pledge after the government unveiled a policy blueprint on new digital assets last week, with the city seeking to cement its role as a global cryptocurrency hub while serving as a test bed for Beijing’s fintech aspirations.