The Financial Services and the Treasury Bureau (FSTB) and the Hong Kong Monetary Authority (HKMA) ran a two month stablecoin consultation at the start of the year with 108 responses. Today they published a legislative proposal including responses to issues raised in the consultation. They plan to submit a bill to the Legislative Council later this year.
“In addition to the existing regulatory regime for VA (virtual asset) trading platforms, the establishment of a licensing regime for FRS (fiat-referenced stablecoin) issuers will further strengthen the VA regulatory framework in Hong Kong in line with international standards and effectively mitigate possible financial stability risks associated with FRS issuance activities,” said the Secretary for Financial Services and the Treasury, Mr Christopher Hui.
Today’s paper clarified several points, although there were only a few changes from the original consultation. One amendment related to capital. The original proposal was that stablecoin issuers must have the greater of 2% of the stablecoin issuance or HKD25 million ($2.9m) in capital. They reduced the percentage to 1%, but this is a minimum and the HKMA can specify a higher amount on a case-by-case basis.
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