In December 2024, the Hong Kong government submitted a proposed stablecoin invoice to the Legislative Council as it seeks to better police the $220 billion commerce. Legislators lately convened to talk regarding the invoice for the first time, with some key officials from the federal government invited to portion their views on the long bustle of stablecoins within the metropolis-direct.
The dedicated LegCo stablecoin committee invited Francis Ho and Tanna Chong, deputy secretaries for monetary companies at the Treasury, to provide their views on stablecoin regulations. Daryl Ho and Ernest Ho, executive directors at the Hong Kong Financial Authority (HKMA), also attended the session alongside officials from the Division of Justice (DoJ).
The invoice assigns jurisdiction over stablecoins and their issuers to the HKMA, the metropolis’s de facto central monetary institution. Issuers must originate a license from the watchdog, with about a of the requirements being a paid-up portion capital of $3.2 million and a segregated pool of reserve assets, which needs to be of “top of the diversity and excessive liquidity with minimal investment risk.”
At some level of the committee sitting, Treasury’s Ho Siu-hong doubled down on the need for stablecoin issuers to originate a license, reports one local outlet. The metropolis’s regulators, led by the HKMA, would, in flip, try to make obvious the rate of the reserve assets is “not lower than equal to the face rate of the circulating true forex stablecoins at any time, and must be effectively separated and saved.”
One of many standout capabilities of Hong Kong’s ‘crypto’ regulatory framework has been the metropolis’s session with commerce stakeholders, and the stablecoin framework was as soon as no plenty of. HKMA CEO Eddie Yue mentioned in December that the central monetary institution had “widely consulted” digital asset carrier suppliers (VASPs); in a separate LegCo subcommittee discussing digital assets closing week, Treasury’s Joseph Chan reiterated this methodology, pointing out that the securities watchdog would prepare a novel panel for VASPs “to make obvious their views and desires are totally regarded as.”
Hong Kong is actually one of many jurisdictions speeding to manage stablecoins as the sector’s prominence surges globally. Taiwan’s Financial Supervisory Commission (FSC) lately proposed permitting the direct’s industrial banks to area and prepare stablecoins. The framework would require international issuers, comparable to Tether and Circle, to originate local authorization for his or her stablecoins, a requirement equivalent to the European Union’s below Markets in Crypto-Sources (MiCA) laws, which Tether has struggled to follow.
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