Hong Kong’s monetary regulators mentioned they’ve concluded a session interval over a licensing program initiative for fiat-referenced stablecoin (FRS) suppliers.
The session, which led to February, acquired 108 submissions from varied stakeholders, together with market members, trade associations, {and professional} organizations.
The Financial Authority (HKMA) and the Monetary Providers and Treasury Bureau (FSTB) introduced this improvement in a joint assertion on July 17.
Stablecoin licensing regime
The regulators acknowledged most respondents agreed {that a} regulatory regime for FRS issuers was needed, contemplating the fast rise of drastic digital property lately. They consider it will handle potential financial and monetary stability dangers and guarantee clear and appropriate safeguards.
Moreover, most respondents additionally supported the proposed regulatory necessities and implementation preparations required by these stablecoin issuers. The regulators wrote:
“FRS, as in comparison with different varieties of stablecoins (e.g. commodity-linked or treasured metal-linked stablecoins), is taken into account as having higher potential to be developed as a generally acceptable technique of fee and therefore poses larger and extra imminent financial and monetary stability dangers.”
Christopher Hui, FSTB Secretary, famous that the licensing regime would bolster Hong Kong’s digital asset framework. He additionally emphasised that it aligns with worldwide requirements, promotes monetary stability, and mitigates losses.
The monetary regulators mentioned they may take into account all of the suggestions in finalizing the legislative proposal for the regulatory regime and goal to introduce a invoice to the Legislative Council quickly.
This announcement follows the launch of Hong Kong’s stablecoin regulatory sandbox program in March. HKMA is processing purposes for the sandbox, and the checklist of members can be introduced quickly.
In the meantime, these efforts replicate Hong Kong’s bid to change into a hub for crypto innovation. Hong Kong stays one of many few areas centered on regulating the crypto trade, making it a favorable vacation spot for trade members.
