Hong Kong Plans to Launch Regulatory Framework for Stablecoins by 2024

Hong Kong’s central banking authority carried out a public consultation on the rollout of stablecoin, with plans to launch a regulatory framework for the digital asset by the end of 2024, local news agency Sina reported on Monday. The move marks another step for Hong Kong to become a regional and global digital asset hub.

Hong Kong Central Bank Completes Public Consultation on Stablecoin Launch

Hong Kong Monetary Authority (HKMA), the city’s central bank, has conducted a public consultation on a regulatory framework for stablecoins, Chen Haolian, deputy director of Financial Services and Treasury Bureau of Hong Kong, said. In addition, the HKMA intends to roll out a regulatory framework for stablecoins by 2023, Haolian added, according to local news outlet Sina.

Haolian also reiterated Hong Kong’s commitment to continue supporting the development of the digital asset industry and Web3. The government has previously released a policy declaration on developing crypto assets, following the principle of “same business, same risk, and same rules” for supervision.

The deputy director said there was a notable surge in the number of financial technology (fintech) companies in Hong Kong over the past five years. Now, more than 800 firms offer fintech services, such as virtual banking and insurance, crypto transactions, and more.

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Hong Kong Attracts Notable Interest from Crypto Companies

Efforts to develop a regulatory framework for stablecoins come as part of Hong Kong’s broader efforts to build a comprehensive set of regulations for digital assets to retrieve its status as a global fintech and digital asset hub.

To this end, in October, Hong Kong authorities announced a plan to legalize crypto retail trading through a mandatory licensing program after recovering from years of political commotion and coronavirus crackdowns. The government said regulators would allow the trading of numerous cryptocurrencies, adding they will not support specific assets such as Bitcoin and Ether.

Furthermore, Hong Kong also said it plans to launch tokenized green bonds for institutional investors in January. A month later, the HKMA announced a successful offering of HK$800 million worth of tokenized green bonds – the first one launched by a government globally.

Following its intense efforts to establish a crypto regulatory framework, Hong Kong’s Securities and Futures Commission (SFC) received 152 submissions from industry experts, corporations, and market participants, underscoring significant interest by crypto-related companies to foray into the revived hub.

Do you think Hong Kong could become the world’s leading crypto hub in the future, especially considering that more companies are fleeing the US due to the industry crackdown? Let us know in the comments below.