Hong Kong Proposes Regulatory Framework for Fiat-Referenced Stablecoins

The Monetary Companies and the Treasury Bureau (FSTB) and the Hong Kong Financial Authority (HKMA) printed a public session paper on laws regarding fiat-referenced stablecoins.

To acquire an HKMA license, stablecoin issuers should meet a number of standards, together with

• Full backing of all circulating stablecoins with reserves “no less than equal to the par worth”
• Segregation and safekeeping of reserve property
• Disclosure and common reporting.

Algorithmic stablecoins won’t be eligible for a license.

Stablecoin issuers should additionally set up a registered workplace in Hong Kong with a chief government, senior administration group, and key personnel.

The proposed licensing regime goals to handle the dangers related to stablecoin improvement and facilitate the expansion of the Web3 ecosystem in Hong Kong.

Mr Eddie Yue, Chief Government of the HKMA, stated:

“We’re supportive of economic innovation and consider that it’s important to place in place the required regulatory guardrails and requirements to allow the long-term, sustainable and accountable improvement of the digital asset ecosystem.”

The session interval ends on February 29, 2024. The HKMA and the SFC have additionally expressed their readiness to obtain functions for the authorization of assorted funds, together with Digital Asset Spot exchange-traded funds (VA Spot ETFs).

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