Hong Kong’s Legislative Council has discussed the government’s proposed “Stablecoins Bill.”
Meeting for the first time since December, the Legislative Council committee reviewed details of the bill’s regulation with key government officials in attendance.
At the meeting, Francis Ho, deputy secretary for Financial Services and the Treasury Bureau (FSTB), highlighted the government’s intention to require stablecoin issuers to secure a license from the Hong Kong Monetary Authority (HKMA).
Initially presented to the Council on 18 December, the proposed legislation mandates that stablecoin issuers must also implement strong reserve stabilization mechanisms and their reserve assets consist of high-quality, highly liquid assets.
Under the proposed framework, new compliance measures will be implemented, such as a minimum paid-up capital requirement of HK$25 million, as well as proof of robust financial health, sufficient liquidity, and risk management frameworks. Misrepresentation or false promotion of stablecoins is explicitly prohibited.
Hong Kong has been pushing to be a central crypto hub for the region. HKMA has also further expanded its authority to oversee, investigate, and enforce compliance.
Last month, HKMA unveiled a new program, the Supervisory Incubator for Distributed Ledger Technology (DLT), to facilitate its safe and effective integration into the banking sector.
The Incubator is designed to provide banks with a structured environment to explore and implement DLT-based solutions while effectively managing the associated risks.
It will focus on mitigating risks that may arise as banks integrate DLT with existing legacy systems, particularly as they move towards productionizing services such as deposits and loans. Tokenized deposits, an area of significant industry interest, will be a core focus from the outset.
HKMA Launches Supervisory Incubator for Responsible Adoption of DLT in Banking
This initiative aims to help banks navigate the risks associated with distributed ledger technology (DLT) while maximizing its potential benefits, particularly in areas like tokenized deposits.
In December, Hong Kong approved four new cryptocurrency exchanges as part of the city’s ongoing efforts to establish itself as a global hub for digital asset trading.
The newly licensed platforms include Accumulus GBA Technology Co., DFX Labs Company, Hong Kong Digital Asset EX, and Thousand Whales Technology (BVI).
Hong Kong Issues Four More Approvals For Crypto Exchanges
Hong Kong approves 4 new crypto exchanges to a total of 7 licensed platforms
