Hong Kong Advances in Stablecoin Regulation Framework

According to PANews, Hong Kong Monetary Authority (HKMA) Deputy Chief Executive, Chan Wai-man, announced progress in establishing a regulatory framework for stablecoin issuance. This initiative aims to lay the groundwork for the development of the cryptocurrency ecosystem in Hong Kong. The related legislation is currently under review by the Legislative Council, with hopes for approval in the coming months. The HKMA is carefully examining potential operational risks associated with stablecoins, including reserve asset management, liquidity, and anti-money laundering (AML) measures. The goal is to ensure that licensed issuers can effectively manage risks and maintain sustainable business models. Chan also highlighted that Hong Kong has long established a roadmap for virtual asset development. The authorities, in collaboration with the Hong Kong Securities and Futures Commission, have a clear division of responsibilities with the aim of transforming Hong Kong into a leading cryptocurrency hub. In recent years, Hong Kong has been developing a central bank digital currency (CBDC), which is believed to facilitate more efficient and cost-effective cross-border payments, thereby promoting international trade and exploring the potential of tokenization.