Hong Kong will start issuing stablecoin licenses before the end of 2025, focusing on limited issuance with the goal of enhancing liquidity and reducing international transaction costs.
The new stablecoin law aims to strictly regulate cryptocurrencies pegged to fiat assets, creating a solid foundation for the development of digital finance and a leading position in the region.
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Hong Kong plans to license stablecoins with a limited number, focusing on fiat-backed stablecoins.
The new law requires stablecoin issuers to have full asset reserves and be supervised by HKMA.
This policy aims to enhance cross-border payment efficiency, reduce risks, and affirm Hong Kong's regional position.
When will Hong Kong begin issuing stablecoin licenses?
According to Mr. Christopher Hui, Secretary for Financial Services and the Treasury of Hong Kong, the stablecoin licensing regime will officially begin in August 2025, with the expected number of licenses at a 'single index' level in the first year.
This reflects a cautious yet proactive approach to supervising digital assets. The main goal is to control risks while encouraging financial innovation and enhancing the efficiency of the payment system.
Establishing a legal framework for stablecoins will contribute to efficient cross-border payments and reduce transaction costs, creating a competitive advantage for Hong Kong in the region.
– Christopher Hui, Secretary for Financial Services and the Treasury of Hong Kong, 7/2024
What are the new points of Hong Kong's stablecoin law?
The new stablecoin law, passed in June 2024, imposes strict regulations on issuance, requiring full asset reserves and segregation of customer assets, increasing transparency and accountability. This is the first time stablecoins have been brought under HKMA's licensing framework.
According to YeFeng Gong – Director of Risk and Strategy, HashKey OTC: This law creates a global standard for reserve assurance, redemption rights, and under close supervision of the authorities, thereby enhancing the reliability for investors and financial institutions.
What practical economic goals does Hong Kong's stablecoin aim for?
Minister Hui emphasized that fiat-backed stablecoins help address challenges in international payments, especially in regions with high currency volatility or underdeveloped financial systems. Stablecoins and other forms of cryptocurrency can reduce transaction costs and accelerate cross-border payments.
This aligns with global trends as many countries, especially major financial institutions like the Central Bank of China and the United States, are promoting initiatives for stablecoins and CBDCs (central bank digital currencies).
Establishing a stable legal framework for cryptocurrencies is key to making digital assets part of the modern global payment system.
– Pan Gongsheng, Governor of the People's Bank of China, 6/2024
What plans does Hong Kong have to enter the regional stablecoin race?
Initially, Hong Kong focused on Hong Kong dollar-backed stablecoins, but interest has increased in offshore renminbi-backed stablecoins. Major Chinese tech corporations like JD.com and Ant Group are actively lobbying for more stable policies for renminbi-backed stablecoins.
Mr. Hui also stated that foreign-currency-related stablecoins need to coordinate with international regulatory bodies to minimize exchange rate and systemic risks. This is an important step to balance trade benefits and financial safety.
What are the specific benefits of the new stablecoin law in Hong Kong?
The stablecoin law reinforces safety for issuers, protects users by requiring full asset reserves, segregating customer assets, and allowing close supervision by HKMA. This legal framework not only stimulates innovation but also increases international investor confidence in the Hong Kong cryptocurrency market.
Additionally, survey results from the market indicate that stablecoins will reduce cross-border transaction costs by 10% to 30%, accelerating payment times from several days to a few minutes.
Comparing stablecoin policies between Hong Kong and other countries
Criteria Hong Kong USA Bahrain Legal Framework Licensing, full reserves, HKMA supervision GENIUS Act, new law for commercial stablecoins Detailed regulations on stablecoins and transactions Type of stablecoin Fiat-backed (fiat-backed) USD-backed and other fiat assets Backed by multiple assets – fiat currency and gold Implementation timeline Starting from 8/2025 Awaiting approval in the House (2024) Effective from 2023 Regulatory Scope Comprehensive, including issuance and trading Focused on issuance and circulation of stablecoins Concentrated on issuance regulations and related services
Frequently Asked Questions about the stablecoin law in Hong Kong
What standards does Hong Kong use to license stablecoins? The standards include full asset reserves, segregation of customer assets, and supervision by HKMA to ensure safety and transparency. Which stablecoin is prioritized for development in Hong Kong? Fiat-backed stablecoins such as the Hong Kong dollar and potentially extendable to offshore renminbi. How does Hong Kong's stablecoin law affect international payments? The law helps reduce cross-border transaction costs and enhances payment speed, contributing to effectively addressing regional currency challenges. How is the implementation of the stablecoin law proceeding? The law will officially take effect in August 2025, with a transitional period to support businesses in adapting. How does Hong Kong compare to the United States in stablecoin regulation? Hong Kong emphasizes regulatory oversight and adequate reserves, while the U.S. is refining laws to control the issuance and circulation of stablecoins.
Source: https://tintucbitcoin.com/stablecoin-hong-kong-cap-phep-gioi-han-cuoi-nam/
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