Hong Kong’s financial authorities, the Hong Kong Monetary Authority (HKMA) and the Financial Services and Treasury Bureau (FSTB), have launched a public consultation to establish a regulatory framework for stablecoins. The proposed framework aims to regulate stablecoin issuers and mitigate potential risks to monetary and financial stability.

The framework includes a licensing regime, requiring fiat-referenced stablecoin (FRS) issuers to meet specific criteria to obtain a license from the Monetary Authority. This measure aims to ensure that only qualified entities can offer FRS to retail investors, protecting public interests. The framework also introduces advertising restrictions to prevent misleading marketing practices.

In addition to the public consultation, the HKMA plans to implement a “sandbox arrangement” to facilitate compliance guidance and feedback collection between regulators and potential FRS issuers. This initiative allows for real-time assessment and adaptation of regulatory policies in the digital finance sector.

Eddie Yue, Chief Executive of the HKMA, believes that stablecoins could play a crucial role in integrating traditional finance with the evolving crypto market. He emphasizes the need for stablecoins to maintain stability to become widely accepted as a payment method. Yue acknowledges the innovative potential of virtual assets but also recognizes the market challenges posed by their volatility.

The ultimate decision on the adoption of alternative payment methods like stablecoins rests with end-users, according to Yue. The Hong Kong government aims to strike a balance between harnessing the innovative potential of cryptocurrencies and addressing the concerns surrounding their price volatility.

This News Article was automatically generated by Bob the Bot (AI)

Information	Details
Geography	Asia
Countries	🇭🇰
Sentiment	neutral
Relevance Score	1
People	Eddie Yue
Companies	HKMA, FSTB, Monetary Authority
Currencies	None
Securities	None