1 week ago
Hong Kong has passed a landmark measure to modulate fiat-backed stablecoins, signaling its continued propulsion to presumption itself arsenic a planetary hub for integer finance.
On May 21, Hong Kong lawmaker Johnny Ng confirmed that the Legislative Council approved the measure aft its 3rd reading. The caller instrumentality is expected to instrumentality effect earlier the extremity of 2025.
Licensing regime
The caller model introduces a licensing authorities for stablecoin issuers done the Hong Kong Monetary Authority (HKMA). It offers a transitional play for businesses to adapt, use for licenses, and conscionable regulatory expectations.
Once the rules are successful effect, lone licensed entities volition beryllium allowed to contented fiat-referenced stablecoins successful oregon tied to the Hong Kong dollar, careless of their geographic location.
The determination seeks to instill confidence, transparency, and beardown compliance standards wrong the city’s increasing virtual plus ecosystem.
He said:
“Hong Kong’s stablecoins are backed by fiat currency arsenic underlying assets, and we invited planetary enterprises and institutions funny successful issuing stablecoins to use successful Hong Kong.”
Meanwhile, Ng stressed the measure is simply a starting constituent for broader Web3 improvement successful the region. He stated that the authorities plans to enactment intimately with private-sector players to plan usage cases and beforehand stablecoin adoption.
Hong Kong’s stablecoin bill
The Hong Kong authorities said the caller model requires immoderate entity issuing a fiat-referenced stablecoin (FRS) tied to the Hong Kong dollar to conscionable strict operational standards.
These see wide plus segregation, redemption astatine par value, and a reliable mechanics for maintaining terms stability.
They indispensable besides comply with anti-money laundering laws, hazard absorption protocols, disclosure obligations, and autarkic auditing requirements. In addition, lone licensed firms tin beforehand oregon advertise these products to the public.
Christopher Hui, Secretary for Financial Services and the Treasury, said the instrumentality adopts a risk-based regulatory exemplary that aligns with planetary standards.
He added that this attack volition assistance make a safer idiosyncratic environment, beforehand semipermanent manufacture growth, and fortify Hong Kong’s estimation arsenic a starring planetary fiscal hub.
The station Hong Kong advances stablecoin authorities introducing caller rules for issuers appeared archetypal connected CryptoSlate.
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