Hong Kong regulators have announced the conclusion of a stablecoin regulation consultation phase, receiving positive feedback from stakeholders.
Support for Stablecoin Regulatory Regime
On July 17, the Financial Services and the Treasury Bureau (FSTB) and the Hong Kong Monetary Authority (HKMA) released the consultation conclusions regarding a proposed stablecoin regulatory regime. The two-month consultation attracted 108 submissions from various stakeholders, including industry associations, professional organizations, and market participants.
A majority of these stakeholders expressed strong support for introducing a regulatory framework to govern fiat-referenced stablecoin (FRS) issuers. This proposed regime aims to manage potential monetary and financial stability risks effectively. Both the FSTB and HKMA confirmed that the feedback received was overwhelmingly positive.
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Alignment with International Standards
Christopher Hui, Secretary for Financial Services and the Treasury, emphasized that the proposed regulatory regime aligns with international standards and mitigates financial risks. He stated, “In addition to the existing regulatory regime for VA trading platforms, the establishment of a licensing regime for FRS issuers will further strengthen the VA regulatory framework in Hong Kong in line with international standards and effectively mitigate possible financial stability risks associated with FRS issuance activities.”
Eddie Yue, Chief Executive of the HKMA, also praised the stakeholders’ supportive comments. He noted that a “well-regulated environment is conducive to the sustainable and responsible development of the stablecoin ecosystem in Hong Kong.”
Before finalizing the legislative proposal, the regulators will incorporate the views and suggestions from the consultation. The HKMA is currently processing applications for the stablecoin issuer sandbox, and a list of participants will be announced soon.
