Hong Kong has handed a landmark invoice to manage fiat-backed stablecoins, signaling its continued push to place itself as a world hub for digital finance.
On Could 21, Hong Kong lawmaker Johnny Ng confirmed that the Legislative Council permitted the invoice after its third studying. The brand new regulation is anticipated to take impact earlier than the tip of 2025.
Licensing regime
The brand new framework introduces a licensing regime for stablecoin issuers by means of the Hong Kong Financial Authority (HKMA). It presents a transitional interval for companies to adapt, apply for licenses, and meet regulatory expectations.
As soon as the foundations are in impact, solely licensed entities shall be allowed to difficulty fiat-referenced stablecoins in or tied to the Hong Kong greenback, no matter their geographic location.
The transfer seeks to instill confidence, transparency, and robust compliance requirements inside the metropolisâs rising digital asset ecosystem.
He stated:
âHong Kongâs stablecoins are backed by fiat forex as underlying belongings, and we welcome international enterprises and establishments excited by issuing stablecoins to use in Hong Kong.â
In the meantime, Ng harassed the invoice is a place to begin for broader Web3 improvement within the area. He acknowledged that the federal government plans to work carefully with private-sector gamers to design use instances and promote stablecoin adoption.
Hong Kongâs stablecoin invoice
The Hong Kong authorities stated the brand new framework requires any entity issuing a fiat-referenced stablecoin (FRS) tied to the Hong Kong greenback to fulfill strict operational requirements.
These embody clear asset segregation, redemption at par worth, and a dependable mechanism for sustaining value stability.
They have to additionally adjust to anti-money laundering legal guidelines, threat administration protocols, disclosure obligations, and impartial auditing necessities. As well as, solely licensed corporations can promote or promote these merchandise to the general public.
Christopher Hui, Secretary for Monetary Providers and the Treasury, stated the regulation adopts a risk-based regulatory mannequin that aligns with international requirements.
He added that this strategy will assist create a safer consumer surroundings, promote long-term trade development, and strengthen Hong Kongâs popularity as a number one worldwide monetary hub.
