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 resulted in February, obtained 108 submissions from numerous stakeholders, together with market members, trade associations, {and professional} organizations.
The Financial Authority (HKMA) and the Monetary Companies 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 mandatory, contemplating the fast rise of drastic digital property lately. They imagine this may 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 kinds 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 cost and therefore poses increased 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’ll take into account all of the suggestions in finalizing the legislative proposal for the regulatory regime and purpose 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 listing of members shall be introduced quickly.
In the meantime, these efforts mirror Hong Kong’s bid to grow to be 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.
