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Hong Kong Prepares Legislation for Stablecoin Issuers

09/09/2024 20:03

According to Odaily, Hong Kong's Financial Services and the Treasury Bureau, along with the Deputy Chief Executive of the Hong Kong Monetary Authority, Chen Haolian, reaffirmed during an event that preparations are underway for legislation regulating fiat-backed stablecoin issuers. The goal is to submit the legislative proposal to the Legislative Council by the end of this year. The Hong Kong government has a clear vision for the development of virtual assets and Web 3.0, emphasizing that only through a transparent, certain, and predictable regulatory environment can financial innovation be encouraged. Chen Haolian pointed out that as virtual assets become mainstream, there is a market consensus on establishing a regulatory framework for fiat-referenced stablecoin (FRS) issuers. This framework is crucial for managing potential monetary and financial stability risks while ensuring transparency and appropriate safeguards. The proposed framework requires FRS issuers to meet several key requirements, including being a registered entity in Hong Kong, operating in Hong Kong, having senior management based in Hong Kong, and maintaining 100% reserve assets to ensure all circulating stablecoins are fully backed by equivalent reserves. The related regulations aim to protect stablecoin users and promote a stable and healthy market development.

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