The Hong Kong Monetary Authority has launched a consultation seeking public feedback on the regulation of stablecoins, including a recommendation to govern some of its issuers like banks.
Hong Kong’s de facto central bank has proposed to regulate stablecoins – digital tokens with prices linked to real assets such as the U.S. dollar.
«The rapid development of crypto-assets, particularly stablecoins, is a topic of keen attention in the international regulatory community as it presents possible risks regarding monetary and financial stability,» said HKMA chief executive Eddie Yue in a statement.
«The HKMA has been closely tracking the relevant development and would like to proactively share our thinking with the public and industry.»
Regime of Choice
Currently, the «payment systems and stored value facilities ordinance» (PSSVFO) allows for the regulation for some stablecoins but not all, depending on the structure of the issuer.
The HKMA is proposing to either expand the PSSVFO to cover stablecoin activities or introduce a new law.
It is also proposing to regulate stablecoin issuers like traditional lenders under Hong Kong’s banking ordinance, citing a similar approach by U.S. President Joe Biden’s «Working Group of Financial Markets».
Consultation is open until the end of March and with plans to introduce the new stablecoin regime by 2024.
