Overview of Stablecoin Regulation in Hong Kong
At a recent Legislative Council meeting, Christopher Hui, who serves as Hong Kong’s Secretary for Financial Services and the Treasury, addressed inquiries about the oversight of stablecoins. Hui clarified that existing over-the-counter (OTC) trading firms engaged in virtual asset transactions do not qualify as “licensed offerors” under current stablecoin regulations. As a result, these entities are prohibited from marketing designated stablecoins to both retail and professional investors.
Measures to Enhance Compliance
To mitigate the risk of unregulated entities bypassing these regulations, the Hong Kong Monetary Authority (HKMA) plans to enhance its public awareness initiatives aimed at promoting compliance. Furthermore, they will actively monitor the market for stablecoin transactions.
Public Caution and Licensing Status
Hui also pointed out that no licenses have been granted to any stablecoin issuers to date, emphasizing the need for caution from the public when considering stablecoin purchases through unlicensed avenues, which carry inherent risks.
Regulatory Framework for Digital Assets
In discussions regarding the regulatory framework for digital asset trading and custody service providers, Hui noted that the Treasury and the Securities and Futures Commission recently wrapped up a public consultation process, which ran from June 27 to August 29. They are now in the reviewing stage of the feedback gathered during this period and are working towards finalizing the details of the licensing framework, with updates on their legislative schedule expected to be announced soon.
