Hong Kong to oblige stablecoin issuers to acquire license — session paper

Hong Kong to oblige stablecoin issuers to acquire license — session paper

Hong Kong has proposed it should settle for and regulate fiat-referenced stablecoins (FRS), however issuers shall be obliged to acquire a particular native license.

This is without doubt one of the details of a session paper revealed on Dec. 27 by the Monetary Companies and the Treasury Bureau (FSTB) and the Hong Kong Financial Authority (HKMA). 

The session interval ends on Feb. 29, 2024. The laws proposal spells out the definition of fiat-referenced stablecoins and requires any corporations ​​that “actively market their issuance of FRS to the general public of Hong Kong” to be licensed by the HKMA.

The standards for acquiring an HKMA license will embrace full backing of all circulating stablecoins with reserves “not less than equal to the par worth,” segregation and safekeeping of reserve belongings, disclosure and common reporting. The doc states that algorithmic stablecoins gained’t qualify for a license.

Associated: Stablecoin legal guidelines: 25 international locations had laws in place in 2023

Stablecoin issuers can even need to open a registered workplace in Hong Kong with a chief government, senior administration group and key personnel in place.

With the related licensing in place, the dangers related to stablecoin growth might be managed appropriately, the Secretary for Monetary Companies and the Treasury, Christopher Hui, mentioned:

“With the implementation of the licensing regime for VA buying and selling platforms from June this 12 months, the legislative proposal to manage FRS is one other necessary measure facilitating Web3 ecosystem growth in Hong Kong.” 

In December, the HKMA and the Securities and Futures Fee (SFC) collectively expressed their readiness to obtain purposes for the authorization of assorted funds, together with Digital Asset Spot exchange-traded funds (VA Spot ETFs), alongside the prevailing crypto futures ETFs.

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