Hong Kong continues to develop new regulatory framework for stablecoins. Christopher Hui, the Secretary for Financial Services and the Treasury, discussed the latest advancements and initiatives in financial technology and innovative financial services in Hong Kong, along with the development of regulations for virtual assets, as reported by Chinese media outlet Zhitongcaijing.
Hong Kong Continues to Develop New Regulatory Framework for Stablecoins
As per Zhitongcaijing, Chinese media, Christopher Hui, the Secretary for Financial Services and the Treasury, provided insights on the progress and initiatives in financial technology and innovative financial services in Hong Kong.
He emphasized the need to seize the opportunities presented by the growth of Web3 and announced the formation of a dedicated task group by the Hong Kong Financial Secretary to offer recommendations for promoting sustainable and responsible development in the Web3 sector.
Additionally, the Hong Kong Monetary Authority (HKMA) is actively developing a regulatory framework for stablecoins and plans to conduct a second round of public consultations later this year.
Earlier this year, the HKMA published a summary of the consultation on the discussion paper regarding crypto assets and stablecoins. The summary outlined the need for mandatory licensing requirements for essential stablecoin operations.
These operations include the establishment and maintenance of stablecoin management regulations, issuance, creation, or redemption of stablecoins, management of stablecoin stability and reserves, storage of user cryptographic keys, and wallet services for managing stablecoin holdings.
The HKMA aims to establish a comprehensive regulatory framework covering aspects such as ownership, governance, and management, financial resource requirements, risk management, anti-money laundering and counter-terrorist financing measures, user protection, regular audits, and disclosure requirements.
It will also ensure that the value of reserve assets for stablecoins always matches the value of outstanding stablecoins. Regulated entities will be prohibited from engaging in activities beyond their licensed scope, such as lending operations for stablecoin wallet operators.
Hong Kong is transforming into a comprehensive economic zone through its openness to foreign businesses. Currently, there are over 800 fintech companies operating in Hong Kong, offering a wide range of innovative and convenient financial services, including mobile payments, cross-border remittances, blockchain, virtual banking, virtual insurance, and virtual asset trading.
The development of virtual assets holds significant importance for the Hong Kong government. In October of the previous year, a virtual asset policy statement was issued, outlining the vision and policy principles of the Hong Kong administration.
This has garnered positive responses from both local and international enterprises, with many expressing interest in expanding their presence in Hong Kong, thereby contributing to the growth of Web3 and fostering the necessary skills in the field.
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