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Authored by: Simon Deane and Jennifer Lok
On 12 January 2022, the Hong Kong Monetary Authority (HKMA) released a discussion paper on crypto-assets and stablecoins (the Discussion Paper).
The Discussion Paper considers the existing regulatory framework on crypto-assets and stablecoins in Hong Kong, taking into account, among other things, the market and regulatory landscape in Hong Kong and other major jurisdictions, the characteristics of stablecoins and the potential risks that may arise in relation to the use of stablecoins, and outlines the HKMA’s views and priorities on the regulatory approach for crypto-assets.
The HKMA’s proposal is to focus initially on payment-related stablecoins, in particular asset-linked stablecoins. Under the new regime, certain stablecoin-related activities will be regarded as regulated activities and need to be licensed by the HKMA.
The HKMA is inviting feedback on the scope of the regulatory regime applicable to stablecoins from members of the public and the industry by 31 March 2022. The aim is to introduce the new stablecoin regulatory regime by 2023-2024. The Discussion Paper can be found here.
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