Lawrence Jengar
July 17, 2024 10:36
The Hong Kong Monetary Authority and the FSTB have announced the conclusion of their consultation on legislative proposals on stablecoin regulation.
According to the Hong Kong Monetary Authority, the Financial Services and Financial Services Board (FSTB) and the Hong Kong Monetary Authority (HKMA) have jointly announced the conclusion of a consultation on a legislative proposal to implement a regulatory regime for issuers of fiat-backed stablecoins (FRS) in Hong Kong.
Public consultation and feedback
During a two-month public consultation period that concluded in February 2024, the Authority received 108 submissions from a range of market participants, industry associations, business and professional organizations, and other stakeholders. A significant number of respondents agreed on the need for a regulatory framework for FRS issuers, citing the increasing prevalence and evolving development of virtual assets (VA). Respondents stressed the importance of managing potential currency and financial stability risks and ensuring transparent and appropriate regulatory safeguards.
The proposed regulatory requirements and implementation measures received general support, with some respondents suggesting further improvements to the proposals.
Statements of key officials
Mr Christopher Hui, Secretary for Financial Services and Treasury, said: “In addition to the existing regulatory regime for VA trading platforms, establishing a licensing regime for FRS issuers will further strengthen Hong Kong’s VA regulatory framework in line with international standards and effectively mitigate potential financial stability risks associated with FRS issuance activities.”
Echoing these sentiments, Eddie Yue, Chief Executive Officer of the Hong Kong Monetary Authority (HKMA), said: “We thank the respondents for their valuable feedback and are encouraged by their overall support for the proposed regulatory regime. We believe that a well-regulated environment is conducive to the sustainable and responsible development of Hong Kong’s stablecoin ecosystem.”
next stage
FSTB and HKMA plan to incorporate the feedback and suggestions from the consultation into the final legislative proposals. The aim is to submit the Bill to the Legislative Council as soon as possible to formally establish the regulatory framework.
The conclusion of the consultation can be found on the FSTB and HKMA websites. In addition, the HKMA is processing applications for the Stablecoin Issuer Sandbox, and the list of sandbox participants will be announced shortly.
Image source: Shutterstock