After a consultation period concluded in February, Hong Kong’s financial regulators reported that they received 108 submissions from a variety of stakeholders regarding the licensing program initiative for fiat-referenced stablecoin (FRS) providers. The majority of respondents agreed that a regulatory regime for FRS issuers was necessary due to the increasing popularity of digital assets in recent years. They believe that this regulation will help manage potential monetary and financial stability risks and ensure appropriate safeguards.
The Financial Services and Treasury Bureau (FSTB) and the Monetary Authority (HKMA) in Hong Kong released a joint statement on July 17, announcing their plans to introduce a licensing regime for stablecoin issuers. According to Christopher Hui, FSTB Secretary, this new framework will strengthen Hong Kong’s digital asset infrastructure and align with international standards, promoting financial stability and reducing the risk of financial losses.
The financial regulators stated that they will take into account all the feedback received during the consultation period to finalize the legislative proposal for the regulatory regime. They aim to introduce a bill to the Legislative Council in the near future. This initiative follows the launch of a stablecoin regulatory sandbox program in March, with the Hong Kong Monetary Authority currently reviewing applications for participation.
Hong Kong’s efforts to regulate the crypto industry reflect its ambition to become a leading hub for crypto innovation. By focusing on stablecoin regulation and introducing a licensing regime for FRS providers, Hong Kong aims to attract industry participants and position itself as a favorable destination for companies operating in the digital asset space. With the announcement of these regulatory developments, Hong Kong remains one of the few regions actively working towards regulating the crypto industry.
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