Hong Kong is gearing up to reveal the results of its stablecoin consultation, a significant step towards regulating the stablecoin industry.
The Financial Services and the Treasury Bureau (FSTB) announced today that it will soon publish the findings of a consultation conducted last December, aimed at creating a legislative framework for stablecoin issuers.
The consultation’s results will inform a proposed bill to be presented to the Legislative Council.
The FSTB has recommended that all issuers of fiat-referenced stablecoins should obtain a license from the Hong Kong Monetary Authority (HKMA).
This move aims to ensure that only licensed entities, such as banks, licensed corporations, and crypto trading platforms, can issue stablecoins to retail users.
The proposed regulations will cover several critical aspects of stablecoin issuance, including reserve management, stability mechanisms, redemption processes, and governance standards.
These measures are designed to promote transparency and protect investors in the stablecoin market.
In March, the HKMA launched a stablecoin sandbox to test and refine regulatory approaches.
Eddie Yue, the chief executive of the HKMA, emphasized that the sandbox would help develop risk-based regulatory requirements, essential for the sustainable growth of the stablecoin industry.
Vincent Chok, CEO of First Digital, the issuer of the FDUSD stablecoin, noted the strong market demand for regulated stablecoins.
He mentioned that many companies are eager to apply for stablecoin licenses in Hong Kong, indicating a positive reception from the industry.
