Hong Kong advances stablecoin regulation after public consultation
Stablecoin issuers will now be required to obtain a license from HKMA.
The Financial Services and the Treasury Bureau (FSTB) and the Hong Kong Monetary Authority (HKMA) released a report after the culmination of the consultation on the stablecoin regime, highlighting the country’s plan to introduce a bill on fiat-referenced stablecoins (FRS) to the legislative council this year.
In December 2023, the FSTB and the HKMA released a consultation paper on a proposed regulatory framework for stablecoin issuers in Hong Kong. Taking into account the inputs received on the consultation, they moved forward with a proposal to regulate fiat-referenced stablecoin issuers by requiring issuers to obtain a license from the HKMA.
Earlier this year, in March, the HKMA also introduced a regulatory sandbox to allow potential stablecoin issuers to develop and test operations without facing penalties, where issuers must provide monthly third-party audits of reserve assets to ensure stablecoin backing.
Christopher Hui, Secretary of the FSTB, stated that this licensing regime will enhance Hong Kong’s virtual asset regulatory framework. These proposals are part of Hong Kong’s ongoing efforts to establish itself as a digital asset hub and revive its reputation as a global business centre.
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