Hong Kong has passed new legislation requiring licenses for issuers of fiat-pegged stablecoins (FRS), striking a balance between cryptocurrency innovation and investor protection.
According to Decrypt, on the 21st (local time), the Hong Kong Legislative Council passed a bill that introduces a licensing system for FRS issuance.
They must be duly licensed by the Hong Kong Monetary Authority (HKMA) and are subject to reserve, redemption requirements, anti-money laundering (AML), risk management, disclosure and eligibility standards.
"The bill is based on the principle of 'same activity, same risk, same regulation,'" Finance Minister Christopher Hui said in a statement.
"We are focused on creating a robust regulatory environment through a risk-centric approach based on international regulatory standards, which will provide a robust foundation for Hong Kong's virtual currency market," he said.
"This is a measure to lay a solid foundation for the development of the cryptocurrency industry," he said. The law is intended to restore Hong Kong's cryptocurrency credibility, which was damaged by the fraudulent exchange JPEX incident in 2023, and to ensure the healthy growth of the cryptocurrency industry.
This is part of the Hong Kong government's strategic approach. After years of caution, Hong Kong has recently shifted to a more accepting tone for cryptocurrencies, and is simultaneously addressing the dual challenges of encouraging innovation and protecting investors.
There is a tricky balance that needs to be resolved. Under the new regulatory regime, only entities duly authorised by the HKMA can issue FRS, and they cannot offer them to retail investors.
Marketing of unlicensed advertisements will also be restricted to licensed publishers. Unlicensed advertisements will be completely banned after the six-month grace period ends, and the HKMA is expected to provide detailed standards.
They plan to continue further discussions.
2025/05/23 14:56 KST
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