Hong Kong is conducting a second round of consultations for a stablecoin regulatory framework, a local legislator recently revealed.
Hong Kong has been working on stablecoin regulations for the past two years. The Hong Kong Monetary Authority (HKMA) first issued a related discussion paper early last year and, in January 2023 published its final recommendations calling for an “agile and risk-based approach.”
In June, the central bank called for public feedback on the proposed regulations, pledging to finalize the framework by the end of next year. According to legislator Duncan Chiu, the government is now conducting consultations on the regulations and expects to release the final guidelines in 2024.
“We are currently conducting the second round of consultation. We hope that by the middle of next year, Hong Kong can announce the regulatory conditions for stablecoins, allowing stablecoin participants to issue stablecoins in Hong Kong,” he stated in his speech at the 2023 Shanghai Blockchain International Week.
The legislator, who also heads the industry lobby group Hong Kong Information Technology Joint Council, believes that stablecoins can open the floodgates of innovation in Hong Kong. By regulating the sector, he added that the city-state would become a global powerhouse in Web3 and spur the development of financial products and services based on stablecoins.
In addition to stablecoins, Chiu also delved into tokenization and a potential digital Hong Kong dollar. On the former, he called on the government to take the lead and tokenize land and other resources, allowing retail investors to participate in the development of Hong Kong. With CBDCs, he called on Hong Kong residents to use the upcoming digital dollar in numbers.
Hong Kong continues to be one of the jurisdictions pushing fervently for adopting digital assets and blockchain technology. This push has come despite major setbacks in recent months, including the collapse of major global ‘crypto’ giants like FTX—where Hong Kong ranked in the top 15 most affected countries globally—and local firms like JPEX.
In its latest move to protect investors, Hong Kong’s Securities and Futures Commission announced that it would publicly disclose all VASPs that have received or applied for its retail trading license “to help the public more easily identify suspicious VASPs.”
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