On 17 July 2024, the Financial Services and the Treasury Bureau (“FSTB”) and the Hong Kong Monetary Authority (“HKMA”) jointly issued their consultation conclusions regarding the legislative proposal for a regulatory framework for fiat-referenced stablecoin (“FRS”) issuers in Hong Kong.
During the two-month public consultation that concluded in February this year, 108 submissions were received from market participants, industry associations, business organizations and other stakeholders. The vast majority of respondents agreed that, due to the growing prevalence and development of virtual assets, a regulatory framework for FRS issuers was necessary effectively to manage potential monetary and financial stability risks, as well as providing transparent and suitable guardrails. The proposed regulatory requirements and implementation plans received broad support, with additional enhancement suggestions included in the feedback.
The FSTB and HKMA will consider the feedback and suggestions from respondents while finalizing the legislative proposals for the regulatory regime, aiming to introduce a bill to the Legislative Council as soon as possible.
The HKMA is also processing the applications for the stablecoin issuer sandbox, with the list of sandbox participants to be announced shortly. Sandbox participants may test their proposed business models within a limited scope specified by the HKMA, and further engage with the HKMA on future compliance with the proposed regulatory regime.
The consultation conclusions can be found here.
