According to local media, the Hong Kong Monetary Authority (HKMA) aims to introduce a regulatory framework for stablecoins by the end of 2024.
According to Hong Kong local media, Joseph Chan Ho-lim, Undersecretary of Financial Services and Treasury, said that they are in the process of getting public comment on stablecoins and aim to introduce a regulatory framework by the end of 2024. As the US government hardens its stance towards the crypto industry following the bankruptcy of FTX, the crypto community in China continues to herald increased policy clarity regarding Hong Kong’s nascent asset class.
HKMA Has Been Working On Regulations For Some Time
On June 1, Hong Kong officially enacted a new crypto regulatory structure, in which exchanges must obtain licenses to operate in the city. Under the new framework, licensed exchanges will be able to allow retail investors to buy and sell certain major cryptocurrencies such as Ethereum and Bitcoin.
While HKMA has been working on the city’s own crypto regulations throughout 2022, it has also specifically participated in the Financial Stability Board’s development of regulatory standards and recommendations regarding stablecoins. The FSB is an international body that monitors and advises the global financial system and has been described in the Web3 space as the de facto leader in setting global crypto rules.
The rules proposed in the negotiation documents between the HKMA and the FSB are of course subject to change, but the documents shed light on the city’s stance on stablecoin regulation. The HKMA suggested starting by issuing stablecoins pegged to fiat currencies as they are more likely to pose imminent financial stability risks.
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