The Hong Kong Monetary Authority (HKMA) is weighing regulations for cryptocurrencies and stablecoins, with plans to launch a framework by July. The latest move would align with recommendations from the Financial Stability Board (FSB), an international organization that aims for global financial stability.
FSB members are expected to establish or amend a regulatory framework for cryptocurrency and stablecoins by July, according to a HKMA discussion paper on the subject. The HKMA is mulling stablecoin regulations around payments, investor protection and how institutions handle digital assets.
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With a worldwide market value of roughly $2.2 trillion, crypto assets are becoming part of the mainstream financial system, Eddie Yue, HKMA CEO, said in a statement.
“The rapid development of crypto-assets, particularly stablecoins, is a topic of keen attention in the international regulatory community as it presents possible risks regarding monetary and financial stability. The HKMA has been closely tracking the relevant development and would like to proactively share our thinking with the public and industry,” Yue said.
Yue added that the HKMA is soliciting feedback from the public and the industry until March 31, and then plans to develop a “risk-based, pragmatic and agile regulatory regime on this front.”
Read more: Regulators Focus on Crypto, Hoping to Avoid Another Post-Crisis Reckoning
“We place emphasis on issues that may affect the public’s confidence in, and the safety, efficiency, and soundness of, our payment systems, and accord appropriate priority to the protection of users,” the HKMA said in the discussion paper.
The approach being taken by the HKMA takes into consideration international recommendations, the local market and regulatory landscape, regulations in other major jurisdictions, and the characteristics stablecoins used for payments, according to the statement.
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