Hong Kong Regulators Wrap Up Stablecoin Regulation Consultation Phase, Received 108 Submissions

The regulators claimed that the proposed regulatory requirements received positive feedback from stakeholders.

Hong Kong regulators have concluded the consultation phase for stablecoin regulation, receiving 108 submissions from stakeholders. The regulators stated that the proposed regulatory requirements received positive feedback from stakeholders.

Hong Kong Regulators Conclude Stablecoin Regulation Consultation Phase

On July 17, Hong Kong regulators, the Financial Services and the Treasury Bureau (FSTB) and the Hong Kong Monetary Authority (HKMA), jointly announced the conclusions of the consultation on proposals for a stablecoin regulatory regime.

The consultation, which began in May, sought feedback on proposals to introduce a licensing regime for fiat-backed stablecoin issuers. The proposals also included measures to enhance the regulatory framework for virtual asset (VA) trading platforms.

During the two-month consultation period, the regulators received 108 submissions from stakeholders. These included industry associations, professional organizations, and market participants.

A majority of the stakeholders participating in the consultation expressed support for the introduction of a regulatory regime to govern fiat-referenced stablecoin (FRS) issuers. Such a regime would facilitate the proper management of potential monetary and financial stability risks.

The FSTB and HKMA both confirmed that the proposed regulatory requirements received positive feedback from stakeholders.

Christopher Hui, the Secretary for Financial Services and the Treasury, asserted that the proposed stablecoin regulatory regime not only aligns with international standards but also mitigates risks.

“In addition to the existing regulatory regime for VA trading platforms, the establishment of a licensing regime for FRS issuers will further strengthen the VA regulatory framework in Hong Kong in line with international standards and effectively mitigate possible financial stability risks associated with FRS issuance activities,” Hui said.

For his part, Eddie Yue, Chief Executive at the HKMA, commended stakeholders’ comments and general support for the proposed regulatory regime. He added that the HKMA believes a “well-regulated environment is conducive to the sustainable and responsible development of the stablecoin ecosystem in Hong Kong.”

Before finalizing the legislative proposal for implementing the regulatory regime, the two regulators are expected to incorporate the views and suggestions of respondents.

Meanwhile, the statement revealed that the HKMA is currently processing applications for the stablecoin issuer sandbox, and a list of sandbox participants will be announced shortly.

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