In December 2024, the Hong Kong authorities submitted a proposed stablecoin invoice to the Legislative Council because it seeks to raised police the $220 billion trade. Legislators lately convened to debate the invoice for the primary time, with some key officers from the federal government invited to share their views on the way forward for stablecoins within the city-state.
The devoted LegCo stablecoin committee invited Francis Ho and Tanna Chong, deputy secretaries for monetary companies on the Treasury, to supply their views on stablecoin rules. Daryl Ho and Ernest Ho, government administrators on the Hong Kong Financial Authority (HKMA), additionally attended the session alongside officers from the Division of Justice (DoJ).
The invoice assigns jurisdiction over stablecoins and their issuers to the HKMA, town’s de facto central financial institution. Issuers should receive a license from the watchdog, with a number of the necessities being a paid-up share capital of $3.2 million and a segregated pool of reserve property, which have to be of “prime quality and excessive liquidity with minimal funding danger.”
Through the committee sitting, Treasury’s Ho Siu-hong doubled down on the necessity for stablecoin issuers to acquire a license, reviews one native outlet. Town’s regulators, led by the HKMA, would, in flip, try to make sure that the worth of the reserve property is “no less than equal to the face worth of the circulating authorized forex stablecoins at any time, and have to be correctly separated and saved.”
One of many standout options of Hong Kong’s ‘crypto’ regulatory framework has been town’s session with trade stakeholders, and the stablecoin framework was no completely different. HKMA CEO Eddie Yue acknowledged in December that the central financial institution had “extensively consulted” digital asset service suppliers (VASPs); in a separate LegCo subcommittee discussing digital property final week, Treasury’s Joseph Chan reiterated this method, stating that the securities watchdog would arrange a brand new panel for VASPs “to make sure their views and wishes are absolutely thought of.”
Hong Kong is one among many jurisdictions dashing to manage stablecoins because the sector’s prominence surges globally. Taiwan’s Monetary Supervisory Fee (FSC) lately proposed permitting the state’s business banks to situation and handle stablecoins. The framework would require world issuers, similar to Tether and Circle, to acquire native authorization for his or her stablecoins, a requirement just like the European Union’s below Markets in Crypto-Belongings (MiCA) regulation, which Tether has struggled to adjust to.
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