Hong Kong has released a consultation paper to regulate fiat-referenced stablecoin, with issuers will need to obtain a specific local license. The consultation paper is published today by the Financial Services and Treasury Bureau and the Hong Kong Monetary Authority.
The consultation period for the proposal begins today and will run until February 29, 2024. The proposal outlines the definition of fiat-referenced stablecoins and introduces a requirement for companies that actively promote the issuance of such stablecoins to the public of Hong Kong to obtain a license from the HKMA.
To obtain an HKMA license, companies will need to meet specific criteria. This includes ensuring that all circulating stablecoins are fully backed by reserves that are at least equal to their par value. Additionally, the proposal emphasizes the need for segregation and safekeeping of reserve assets, as well as regular disclosure and reporting. It is important to note that algorithmic stablecoins will not be eligible for a license under these regulations.
Furthermore, stablecoin issuers will be required to establish a registered office in Hong Kong and have a chief executive, senior management team, and key personnel in place.
Policy and Regulation
Stablecoins
