Hong Kong Monetary Authority: Will take the lead in regulating stablecoins that claim to be pegged to fiat currency value

ChainCatcher news, the Hong Kong Monetary Authority (HKMA) stated in its "2022 Annual Report" released today that the focus for 2023 will include virtual assets, and the HKMA will refer to the latest market developments and revisions of international standards in this process.

To promote the sustainable and responsible development of the virtual asset industry, the HKMA will actively participate in relevant international organizations and collaborate with the government and other financial regulatory bodies to establish a comprehensive regulatory framework for virtual assets. The HKMA will continue to develop a flexible and risk-based regulatory system for stablecoins, aiming to support financial innovation and market development while addressing the potential monetary and financial stability risks posed by stablecoins. The HKMA will begin to formulate more detailed regulatory requirements, taking into account various factors, including the latest market developments, recommendations and best practices from international organizations regarding stablecoin regulation, and responses received from discussion papers on crypto assets and stablecoins. The HKMA will also continue to actively participate in international discussions on stablecoins and monitor developments in major markets regarding crypto assets.

After considering the opinions collected from public consultations and relevant international standards, the HKMA will adopt a "same risk, same regulation" approach to establish the regulatory system for stablecoins and define its regulatory scope. "In the future, the first targets for regulation will be those stablecoins that claim to be pegged to the value of one or more fiat currencies," as such stablecoins may pose higher and more urgent potential risks to monetary and financial stability. (source link)