page contents Hong Kong begins discussions to introduce stablecoin regulatory framework – The News Headline

Hong Kong begins discussions to introduce stablecoin regulatory framework

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

HKMA’s “Dialogue Paper on Crypto-assets and Stablecoins” highlights the explosive enlargement of the stablecoin marketplace when it comes to marketplace capitalization since 2020 and the concurrent regulatory suggestions put forth via world regulators together with america’ Monetary Motion Process Pressure (FATF), the Monetary Balance Board (FSB) and The Basel Committee on Banking Supervision (BCBS).

Marketplace Capitalization of Crypto-assets. Supply: HKMA

In line with the HKMA, the present measurement and buying and selling job of crypto-assets won’t pose a right away risk to the stableness of the worldwide monetary device from a systemic standpoint. Alternatively, the dialogue paper warned:

“The rising publicity of institutional buyers to such resources as a substitute for or to enrich conventional asset categories for buying and selling, lending and borrowing […] point out rising interconnectedness with the mainstream monetary device.”

Marketplace Capitalization of Primary Stablecoins. Supply: HKMA.

In response to the above determine, HKMA’s paper displays that the worldwide marketplace capitalization stood at about $150 billion in December 2021, “representing about five% of the entire crypto-asset marketplace.” The regulator has additionally shared an inventory of 8 questions to hunt policy-related suggestions mentioning 5 conceivable regulatory results — no motion, opt-in regime, risk-based regime, catch-all regime and blanket ban:

Imaginable coverage choices for regulating crypto-assets. Supply: HKMA.

HKMA expects stakeholders to put up their responses via 31st March 2022, and objectives “to introduce the brand new regime no later than 2023/24.”

Primary jurisdictions’ regulatory stance in opposition to stablecoins. Supply: HKMA.

On an finish observe, the regulator mentioned that payment-related stablecoins have a better doable for being included into the mainstream monetary device and even daily industrial and financial actions. 

Because of this, the HKMA considers increasing the scope of the Cost Methods and Saved Price Amenities Ordinance (PSSVFO), a legislation that determines the legality of economic merchandise. 

Comparable: Hong Kong actual property large leads $90M carry for crypto financial institution Sygnum

Complementing the native executive’s pro-crypto intentions, considered one of Hong Kong’s biggest belongings builders Solar Hung Kai invested $90 million in Sygnum, a Swiss financial institution devoted to virtual asset protecting.

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

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