Hong Kong to Introduce a New Stablecoin Legislative Framework

A licensing regime for stablecoin issuers has been announced by Hong Kong’s financial authorities as part of the region’s legislative proposal to regulate the industry.

After a two-month public consultation that ended in February, the Hong Kong Monetary Authority (HKMA) and Financial Services and the Treasury Bureau (FSTB) have released their consultation conclusions.

These conclusions state that the majority of respondents agreed that a regulatory regime should be established for stablecoin issuers who are referencing fiat currency.

A total of 108 submissions, including those from industry participants and professional institutions, were received by the HKMA and FSTB during the consultation period.

According to the HKMA, the main requirement under the proposal is for all stablecoin issuers to obtain a license from them, taking into consideration factors like their place of incorporation, operations location, and use of Hong Kong bank accounts for issuance and redemption processes.