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Hong Kong eyes Stablecoin Regulatory Regime by 2024

Hong Kong is moving forward with a regulatory framework for cryptocurrencies pegged to traditional financial assets, seeking public comments on stablecoins and planning to introduce a regulatory framework by the end of 2024. This development is a major milestone for the region, which has taken a welcoming stance towards crypto trading in contrast to mainland China where it is illegal.

The proposed rules prioritize regulating stablecoins pegged to fiat currencies, which are more likely to pose financial stability risks, and require stablecoins to be fully backed by high-quality and high-liquidity assets at all times. The Hong Kong Monetary Authority also participated in developing regulatory standards and recommendations on stablecoins with the Financial Stability Board.

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