Hong Kong’s Stablecoin Regulations Near Final Approval

Crypto News Regulation

Hong Kong’s Big Step: Stablecoin Regulations Near Final Approval

Written by Aaron S.,

Editor-In-Chief

Last Updated: December 26, 2024

Key Takeaways

Hong Kong’s Stablecoins Bill requires issuers to get licensed and meet strict rules to ensure safety and stability in the market;
The proposed law focuses on licensing, distribution rules, and consumer protections to regulate stablecoin use and offerings;
The bill must pass three reviews in the Legislative Council before it can be signed into law by Hong Kong’s leader.

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Hong Kong’s Big Step: Stablecoin Regulations Near Final Approval

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According to a report on December 26, Hong Kong is moving closer to introducing clear rules for stablecoins.

A draft law, known as the Stablecoins Bill, was recently shared in an official government notice. It has now reached the Legislative Council, which will be reviewed in three stages before becoming law.

The proposed law focuses on three main areas. First, it requires anyone issuing stablecoins in Hong Kong to apply for a license from the Hong Kong Monetary Authority (HKMA).

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Second, it sets rules for offering and distributing these tokens. Third, it introduces marketing guidelines and stronger consumer protections.

To get a license, issuers must meet strict standards. This includes proving they have enough resources, stable reserves, and reliable systems to keep the coin’s value steady.

Regulators will also check the backgrounds of the people in charge of the issuing companies. Only licensed issuers will be allowed to create or promote stablecoins in Hong Kong.

The bill also aims to make stablecoins safer for users. It sets clear rules for how companies can handle these tokens and ensures that unauthorized platforms cannot offer them.

Before the law can take effect, it must pass three formal reviews in the Legislative Council. Each review will allow lawmakers to debate and suggest changes.

If approved, the final version will be sent to the region’s leader for approval and signing into law.

Hong Kong’s efforts to regulate stablecoins are just one part of its growing focus on digital finance. Recently, HKMA introduced the Digital Bond Grant Scheme (DBGS) program. What is the purpose of this program? Read the full story.