Hong Kong is taking further steps to regulate stablecoins. After working on this for the past two years, they’ve recently entered a second consultation phase. Initially, the Hong Kong Monetary Authority (HKMA) discussed this topic early last year and finalized their recommendations by January 2023, suggesting a flexible and risk-conscious approach.
By June, they sought public input on these proposed regulations and committed to establishing a definitive framework by next year’s end. Duncan Chiu, a local legislator, shared that the government is actively discussing these regulations and aims to finalize them in 2024.
Speaking at the 2023 Shanghai Blockchain International Week, Chiu stated, “We’re now in our second round of talks. We’re hopeful that by mid-next year, we can disclose Hong Kong’s stablecoin regulations, enabling their issuance here.” As the leader of the Hong Kong Information Technology Joint Council, Chiu sees stablecoins as a door to innovation in Hong Kong. With proper regulation, he believes Hong Kong can become a significant player in the Web3 space, promoting new financial products rooted in stablecoins.
Beyond just stablecoins, Chiu expressed interest in the tokenization of assets like land, encouraging the government to spearhead such initiatives for the benefit of everyday investors. He also emphasized the potential of a digital Hong Kong dollar and encouraged its adoption among citizens.
Despite facing challenges like the fall of major cryptocurrency companies, Hong Kong remains determined to embrace digital assets and blockchain tech. As part of its efforts to safeguard investors, the city’s Securities and Futures Commission plans to reveal all Virtual Asset Service Providers (VASPs) that have applied for or secured its retail trading license, aiding the public in spotting questionable VASPs.