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 varied stakeholders, together with market individuals, 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 said most respondents agreed {that a} regulatory regime for FRS issuers was essential, contemplating the fast rise of drastic digital belongings lately. They consider this can 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 sorts of stablecoins (e.g. commodity-linked or valuable metal-linked stablecoins), is taken into account as having higher potential to be developed as a generally acceptable technique of cost 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’ll think about 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 functions for the sandbox, and the record of individuals might be introduced quickly.
In the meantime, these efforts replicate Hong Kong’s bid to turn out to be a hub for crypto innovation. Hong Kong stays one of many few areas centered on regulating the crypto trade, making it a good vacation spot for trade individuals.