Tether (USDT) Stablecoin logo.
costfoto | nuphoto | Getty Images
Hong Kong passed the Stubcoin bill on Wednesday, expanding its cryptocurrency licensing system as more governments recognize digital assets.
Unlike volatile digital assets like Bitcoin, the value of a stubcoin is tied to real-world assets like Fiat currency and commodities like gold.
The new law focusing on the stupid stubcoins of Fiat Reference requires stable issuers to obtain licenses from Hong Kong monetary authorities and must comply with a variety of requirements, including proper management of asset preparations and separation of client assets.
“It will strengthen Hong Kong’s existing regulatory framework for virtual asset (VA) activities, thereby promoting economic stability and promoting financial innovation,” the central bank institution said. It added that further consultations will be carried out on a detailed regulatory framework.
In a statement, the Hong Kong government said that Stablecoins’ policy is expected to come into effect this year, and that “sufficient time” will allow the industry to understand the requirements.
In 2023, Hong Kong introduced a virtual asset licensing system. This requires cryptocurrency companies with an official presence in the city to meet certain standards and requirements for providing digital assets to retail investors in the city. However, existing policies did not include Stablecoins in their scope.
“Hong Kong’s new Stablecoin policy sets a global benchmark by mandating full reserve support, strict redemption guarantees and HKMA monitoring,” Hashkey OTC’s Director of Risk and Strategy, Yefeng Gong, told CNBC. Hashkey OTC is a trading arm of Hashkey Group and features a cryptographic platform licensed in Hong Kong.
The policy “positions Hong Kong as a leader in digital finance, compliant with it, while ensuring institutional grade reliability for traders,” he added.
Cryptocurrency and legitimacy
The move from Hong Kong comes just days after the US Senate advanced its genius law. This establishes an initial regulatory framework for the issuer of the sanuma, when implemented.
Promoting to regulate Stablecoins is being strengthened worldwide, and other jurisdictions also implement their own regulatory frameworks such as the European Union, Singapore, the United Arab Emirates and Japan, blockchain intelligence company Chain Lisil said in a report on Wednesday.
Chengyi Ong, Asia-Pacific Policy Director for Chain Melting, told CNBC that the latest regulations are expected to help adopt and legitimize the code.
“[Stablecoins] While they form the backbone of crypto-ecosystems, their stability opens the door to use in overcoming frictions such as slow cross-border payments and settlements that pass traditional finances to dogs,” Ong said.
“This potentially transformative utility is to take steps towards a regulatory regime that promotes governments around the world, from Europe to Asia, and encourages the emergence of high-quality stubcoins,” she added.
As of this month, Stubcoin’s total market capitalization is approximately $232 billion, according to chain analysis.
Source link
