Hong Kong Tightens Stablecoin Rules with New Licensing Law
Hong Kong is stepping up its stablecoin regulations. The city has passed a new law that requires anyone issuing stablecoins tied to the Hong Kong dollar to get a license. This move aims to manage risks and ensure stability in the digital asset market.
Under the Stablecoins Bill, licensed issuers must follow strict rules. These include managing reserves, allowing redemptions at face value, and keeping client assets separate. They also need to meet standards for anti-money laundering, risk management, disclosure, and auditing.
Christopher Hui, Secretary for Financial Services and the Treasury, said the law follows the principle of “same activity, same risks, same regulation.” It aims to create a strong regulatory environment that matches international standards.
the new licensing regime will also limit stablecoin advertisements to licensed issuers. This is to prevent scams. The government plans to introduce further regulations on crypto trading platforms, over-the-counter services, and custodians in the coming months.
Interest in cryptocurrencies is growing in Hong Kong. A recent survey found that 25% of respondents plan to hold cryptocurrencies. The new Stablecoins bill is expected to take effect later this year.
