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Hong Kong’s Financial Services and Treasury Bureau (FSTB) and the Hong Kong Monetary Authority (HKMA) announced final recommendations for a local stablecoin law on July 17, following a public consultation.
Hong Kong’s New Stablecoin Licensing Framework Explained
Final recommendations for local stablecoin law were announced by the FSTB and the HKMA. The two Hong Kong financial institutions pursued a legislative proposal to establish rules for issuers of fiat-referenced stablecoins (FRS) on July 17.
This follows 108 responses from a variety of stakeholders, including market participants, industry associations, and professional organizations, during a two-month public consultation session that concluded in February.
A regulatory framework is required for FRS issuers, according to most submission respondents, to control risks to monetary and financial stability and to ensure effective and transparent oversight.
Consultation Feedback Shapes Hong Kong’s Stablecoin Policies
All things considered, responders were generally in favor of the suggested regulatory requirements and implementation arrangements, and they even offered some extra proposals.
Per Cointelegraph, current regulatory measures for virtual asset (VA) trading platforms would be supplemented by the new licensing framework for FRS issuers, as pointed out by Christopher Hui, secretary for the FSTB.
According to Hui, the VA regulatory environment in Hong Kong would be "further strengthened" to meet international requirements and reduce the dangers to financial stability caused by stablecoin supply.
The CEO of the Hong Kong Monetary Authority (HKMA), Eddie Yue, thanked the public for their comments and reaffirmed the HKMA's unwavering backing of the proposed regulatory framework, which will hopefully foster a responsible and sustainable stablecoin environment in the city. What did he say?
“We believe that a well-regulated environment is conducive to the sustainable and responsible development of the stablecoin ecosystem in Hong Kong.”
Strengthening Hong Kong’s Virtual Asset Regulatory Environment
With the goal of presenting a bill to the legislative council soon, the FSTB and the HKMA have stated that they will include the feedback into the final legislative proposal.
The Hong Kong Monetary Authority (HKMA) also announced that it will soon make available the names of those who have applied to participate in a stablecoin issuer sandbox.
The digital asset industry is closely monitored and controlled by Hong Kong's regulations.
The seven cryptocurrency exchanges that the Hong Kong Securities and Futures Commission has added to its list of warnings as of July 15th are those that are running without proper licensing, which has led to concerns about the security of its investors.
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