The Hong Kong Monetary Authority (HKMA) intends to roll out new regulations on crypto-assets and stablecoins by either this year or in 2024.
On 12 January 2022, the HKMA had issued a discussion paper on crypto-assets and stablecoins and invited feedback from stakeholders and received a total of 58 submissions in response from the industry, public bodies, business and professional organisations, and individuals.
On the whole, HKMA said that the respondents were supportive of regulating stablecoins with a risk-based and agile approach in the conclusion summary of the discussion paper.
The regulator will begin by regulating stablecoins backed by fiat currencies, given the “higher and more imminent monetary and financial stability risks that they may pose”.
The respondents also broadly supported the need to take into account the latest market developments and draw reference from the discussion of international regulatory bodies when developing the relevant regulatory regime.
The HKMA is currently weighing the pros and cons between introducing a new legislation versus amending existing laws for implementation.
“An appropriate regulatory environment will help address financial stability risks possibly posed by stablecoins, and promote the orderly and sustainable development of the industry.
In drawing up the specific regulatory arrangements, the HKMA will consider the feedback received, latest market development and international discussion. We expect to implement the regulatory arrangements in 2023/24,”
said Eddie Yue, Chief Executive of the HKMA.
