Hong Kong is deepening its commitment to crafting a stablecoin regulatory framework, as recently shared by local lawmaker Duncan Chiu.
Over the last two years, Hong Kong has been engaged in developing guidelines for stablecoins. Early in the previous year, the Hong Kong Monetary Authority (HKMA) released a discussion document on this matter. Fast forward to January 2023, the HKMA unveiled its final suggestions advocating for a “flexible yet risk-conscious strategy.”
This past June, the central bank sought public opinions on these proposed guidelines, with a goal to solidify the framework by 2024’s end. Chiu informed that the government is currently in its second consultation phase and envisions the ultimate guidelines to be publicised in 2024.
“Mid-next year should see Hong Kong unveiling the regulatory criteria for stablecoins, enabling entities to issue these digital assets within our region,” Chiu emphasised during the 2023 Shanghai Blockchain International Week.
Chiu, who also presides over the Hong Kong Information Technology Joint Council, is optimistic about the transformative potential of stablecoins for Hong Kong. In his view, properly supervised stablecoins could cement Hong Kong’s position as a dominant Web3 hub, leading to the creation of innovative financial tools and solutions anchored on these digital assets.
On a broader note, Chiu expressed interest in the tokenization of assets like land, urging the government to pioneer this effort. This would offer retail investors an opportunity to be stakeholders in Hong Kong’s growth. On the topic of Central Bank Digital Currencies (CBDCs), he encouraged locals to actively adopt the imminent digital Hong Kong dollar.
Despite challenges, including the downfall of key global crypto players like FTX—which had significant repercussions for Hong Kong—and local businesses such as JPEX, the territory remains steadfast in its pursuit of digital assets and blockchain innovation.
In a step towards enhanced investor protection, Hong Kong’s Securities and Futures Commission has decided to disclose information about Virtual Asset Service Providers (VASPs) with a retail trading license, aiming to arm the public with the tools to spot potentially questionable VASPs.
