Hong Kong Tightens Stablecoin Rules with New Licensing Law
Hong Kong is stepping up its stablecoin regulations. The city has passed a new law that requires anyone issuing stablecoins linked to the Hong Kong dollar to get a license. This move aims to manage risks and ensure stability in the digital asset market.
Under the Stablecoins Bill, licensed issuers must follow strict rules. These include managing reserves, allowing redemptions at face value, and keeping client assets separate. They must also meet standards for anti-money laundering, risk management, disclosure, and auditing.
Christopher Hui, Secretary for Financial Services and the Treasury, said the law follows the principle of “same activity, same risks, same regulation.” It aims to create strong rules that match international standards. Hui believes this will support the healthy and sustainable development of Hong Kong’s stablecoin ecosystem.
The new licensing regime will also restrict stablecoin advertisements to licensed issuers. This is to prevent scams.The government plans to introduce further regulations on crypto trading platforms, over-the-counter services, and custodians in the coming months.
Interest in cryptocurrencies is growing in Hong Kong. A November 2024 survey by the Hong Kong University of Science and Technology found that 25% of respondents plan to hold cryptocurrencies. This is up 6% sence September 2023. The survey also showed rising confidence in regulated crypto exchanges.
The new Stablecoins Bill is expected to take effect later this year. It aims to create a robust regulatory surroundings for the digital asset ecosystem.
