The Hong Kong Financial Authority (HKMA) and the Monetary Companies and Treasury Bureau (FSTB) have issued a session paper on the brand new stablecoin laws. The paper might be used to formulate a licensing system for stablecoin issuers following related efforts in Singapore that benefited the USDC Issuer Circle.
The federal government is searching for enter on the situations underneath which a license must be issued. Solely licensed entities can market merchandise to retail buyers.
Hong Kong proposes a sandbox for stablecoins
The brand new paper follows engagements with stakeholders following the discharge of the dialogue paper on cryptoassets and stablecoins by the Hong Kong Financial Authority final yr. The ultimate paper discusses the ban on promoting of unlicensed merchandise and the way governments can rapidly amend laws. It additionally proposes a transitional section till the federal government implements stablecoin laws.
The federal government may even launch a pilot surroundings to concern steering and search suggestions from related issuers. Christopher Hoey, Minister for Monetary Companies and Treasury, stated he would supply particulars of the sandbox in a separate announcement.
Learn extra: What’s a stablecoin? Newbie’s information
In June, the Hong Kong authorities issued a brand new licensing system for cryptocurrency exchanges. The regulation addressed the custody guidelines for cryptocurrency corporations and the property they’ll supply to the general public.
On the time, cryptocurrency trade members welcomed the readability of the system however criticized its strictness. Hong Kong has additionally sought to draw enterprise exercise underneath the broader “Web3” description. This has arguably led to a migration of cryptocurrencies to Asia amid declining volumes on main exchanges in 2023.
Latest developments in stablecoin laws
Hong Kong’s laws is the most recent effort to bridge the world’s barrier to cryptocurrencies and fiat currencies. Following new laws in Singapore, stablecoin issuer Circle has obtained a fee establishment license that permits some customers to carry USDC.
Upcoming regulation of crypto asset markets in Europe has seen French banking big Société Générale concern a stablecoin backed by the euro. Circle just lately added its EURC stablecoin to Solana as European laws turn out to be clearer. USDC, one other cryptocurrency, faces challenges within the US on account of an absence of regulatory readability.
Learn extra: A information to the perfect stablecoins in 2024
This week, it was revealed that Circle, US change Coinbase and enterprise agency a16z have invested in a cryptocurrency political motion committee to push for clearer US guidelines. Senator Patrick McHenry, a key determine in advancing a stablecoin invoice by Congress this yr, introduced that he won’t run once more through the 2024 election.
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