The Hong Kong Financial Authority (HKMA) and the Monetary Companies and Treasury Bureau (FSTB) have launched a session paper on new stablecoin laws. The paper will probably be used to draft a licensing regime for stablecoin issuers following comparable efforts in Singapore which have benefitted USDC issuer Circle.
The federal government seeks enter on the circumstances below which it ought to situation a license. Solely licensed entities can market merchandise to retail buyers.
Hong Kong Proposes Stablecoin Sandbox
The brand new paper follows engagements with stakeholders after the discharge of the Dialogue Paper on Crypto-Property and Stablecoin by the HKMA final yr. The most recent paper discusses prohibitions on ads of unlicensed merchandise and the way governments can amend laws rapidly. It additionally proposes a transitionary section till the federal government implements the stablecoin laws.
The federal government may even launch a sandbox to situation steerage and solicit suggestions from issuers. It’s going to present particulars of the sandbox in a separate announcement, mentioned Christopher Hui, the Secretary for Monetary Companies and Treasury.
Learn extra: What Is a Stablecoin? A Newbie’s Information
In June, the Hong Kong authorities promulgated a brand new licensing regime for crypto exchanges. The regime addressed custody guidelines for crypto companies and which belongings they may supply to the general public.
On the time, crypto business contributors welcomed the regime’s readability however criticized its strictness. Hong Kong has additionally sought to draw enterprise exercise below the broader “Web3” description. It arguably led to crypto’s migration to Asia amid falling volumes at main exchanges in 2023.
Latest Developments in Stablecoin Legal guidelines
Hong Kong’s legislation is the newest effort to bridge the world’s crypto and fiat rails. Following Singapore’s new laws, stablecoin issuer Circle acquired a cost establishment license that permits some customers to carry USDC.
Upcoming Markets-in-Crypto-Property laws in Europe has seen French banking big Societe Generale situation a euro-backed stablecoin. Circle additionally not too long ago added its EURC stablecoin to Solana as European laws rising more and more clear. USDC, its different coin, faces challenges within the US from an absence of regulatory readability.
Learn extra: A Information to the Greatest Stablecoins in 2024
This week, Circle, US change Coinbase, and enterprise agency a16z have been revealed to have invested in a crypto political motion committee to foyer for clearer US guidelines. Senator Patrick McHenry, a key determine in advancing a stablecoin invoice by way of Congress this yr, has introduced that he won’t re-run through the 2024 elections.
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