Hong Kong begins discussions to introduce stablecoin regulatory framework

The Hong Kong Monetary Authority shared an inventory of eight questions to search policy-related suggestions citing 5 potential regulatory outcomes — no motion, opt-in regime, risk-based regime, catch-all regime and blanket ban.

Hong Kong begins discussions to introduce stablecoin regulatory framework

Hong Kong’s central banking establishment, the Hong Kong Monetary Authority (HKMA), launched a questionnaire to gauge public opinion on rules for crypto-assets and stablecoins. The state-backed regulator intends to set up a regulatory framework by 2023-24.

HKMA’s “Discussion Paper on Crypto-assets and Stablecoins” highlights the explosive development of the stablecoin market by way of market capitalization since 2020 and the concurrent regulatory suggestions put forth by worldwide regulators together with the United States’ Financial Action Task Force (FATF), the Financial Stability Board (FSB) and The Basel Committee on Banking Supervision (BCBS).

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According to the HKMA, the present dimension and buying and selling exercise of crypto-assets might not pose an instantaneous risk to the soundness of the worldwide monetary system from a systemic viewpoint. However, the dialogue paper warned:

“The growing exposure of institutional investors to such assets as an alternative to or to complement traditional asset classes for trading, lending and borrowing […] indicate growing interconnectedness with the mainstream financial system.”

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Based on the above determine, HKMA’s paper reveals that the worldwide market capitalization stood at about $150 billion in December 2021, “representing about 5% of the overall crypto-asset market.” The regulator has additionally shared an inventory of eight questions to search policy-related suggestions citing 5 potential regulatory outcomes — no motion, opt-in regime, risk-based regime, catch-all regime and blanket ban:

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HKMA expects stakeholders to submit their responses by thirty first March 2022, and goals “to introduce the new regime no later than 2023/24.”

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On an finish observe, the regulator acknowledged that payment-related stablecoins have the next potential for being included into the mainstream monetary system and even day-to-day industrial and financial actions. 

As a consequence, the HKMA considers increasing the scope of the Payment Systems and Stored Value Facilities Ordinance (PSSVFO), a legislation that determines the legality of monetary merchandise. 

Related: Hong Kong actual property large leads $90M increase for crypto financial institution Sygnum

Complementing the native authorities’s pro-crypto intentions, one in every of Hong Kong’s largest property builders Sun Hung Kai invested $90 million in Sygnum, a Swiss financial institution devoted to digital asset holding.

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As CryptoPumpNews reported, the Series B funding spherical brings Sygnum’s post-money valuation to $800 million, marking a tenfold surge in consolidated revenues from 2021.

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