Hong Kong regulators have announced the completion of a consultation phase regarding the regulation of stablecoins, with 108 submissions received from stakeholders. The regulators have stated that the proposed regulatory requirements have received positive feedback from stakeholders.
The Financial Services and the Treasury Bureau (FSTB) and the Hong Kong Monetary Authority (HKMA) jointly issued their consultation conclusions on July 17, after a two-month consultation period. During this time, industry associations, professional organizations, and market participants provided their views and opinions.
The majority of stakeholders expressed their support for the introduction of a regulatory regime that would govern issuers of fiat-referenced stablecoins (FRS). Such a regime would ensure the proper management of potential risks to monetary and financial stability. Both the FSTB and HKMA confirmed that the proposed regulatory requirements have been well received by stakeholders.
Christopher Hui, the Secretary for Financial Services and the Treasury, stated that the proposed regulatory regime not only aligns with international standards but also helps mitigate risks. He believes that the establishment of a licensing regime for FRS issuers, in addition to the existing regulatory framework for virtual asset (VA) trading platforms, will strengthen the VA regulatory framework in Hong Kong and effectively manage potential financial stability risks associated with FRS issuance activities.
Eddie Yue, Chief Executive at the HKMA, praised stakeholders for their comments and general support for the proposed regulatory regime. He emphasized the importance of a well-regulated environment for the sustainable and responsible development of the stablecoin ecosystem in Hong Kong.
Before finalizing the legislative proposal for implementing the regulatory regime, the regulators will take into account the views and suggestions provided by respondents during the consultation phase. The HKMA is currently processing applications for the stablecoin issuer sandbox, and a list of sandbox participants will be announced soon.
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