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, obtained 108 submissions from varied stakeholders, together with market individuals, trade associations, {and professional} organizations.
The Financial Authority (HKMA) and the Monetary Providers and Treasury Bureau (FSTB) introduced this growth in a joint assertion on July 17.
Stablecoin licensing regime
The regulators said most respondents agreed {that a} regulatory regime for FRS issuers was crucial, contemplating the speedy rise of drastic digital property 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 forms 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 greater 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 contemplate 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 functions for the sandbox, and the checklist of individuals will probably be introduced quickly.
In the meantime, these efforts mirror 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 favorable vacation spot for trade individuals.