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Hong Kong Regulators Propose Mandatory Licenses for Fiat-Backed Stablecoin Issuers
The Hong Kong Monetary Authority (HKMA) and the Financial Services and the Treasury Bureau (FSTB) are also planning a sandbox to provide guidance on compliance.
Hong Kong financial regulators published proposals for supervising stablecoin issuers through a licensing regime and a regulatory sandbox to communicate "supervisory expectations and guidance on compliance" to prospective issuers.
The jurisdiction's central bank, the Hong Kong Monetary Authority (HKMA), and the Financial Services and the Treasury Bureau (FSTB) are seeking feedback by Feb. 29. Fiat-referenced stablecoins are a type of cryptocurrency designed to maintain its value on par with sovereign currencies like the U.S. or Hong Kong dollar.
STORY CONTINUES BELOW
Hong Kong is seeking to position itself as a regional crypto hub. It implemented a licensing regime for crypto service providers in June that recognizes retail crypto trading as a regulated activity. The jurisdiction has been planning regulations for fiat-backed stablecoins for some time.
The regime will be introduced through legislation requiring issuers who meet certain conditions to obtain a license from the HKMA. Firms looking to issue a fiat-referenced stablecoin in Hong Kong, to issue a Hong Kong dollar-referenced stablecoin or to market stablecoins to the Hong Kong public will need a license to operate.
"We are supportive of financial innovation and believe that it is essential to put in place the necessary regulatory guardrails and standards to enable the long-term, sustainable and responsible development of the virtual asset ecosystem," HKMA CEO Eddie Yue said in a statement.
Sandali Handagama
Sandali Handagama is CoinDesk's deputy managing editor for policy and regulations, EMEA. She is an alumna of Columbia University's graduate school of journalism and has contributed to a variety of publications including The Guardian, Bloomberg, The Nation and Popular Science. Sandali doesn't own any crypto and she tweets as @iamsandali
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Crypto Industry Asks President Trump to Stop JPMorgan’s 'Punitive Tax' on Data Access
A coalition of fintech and crypto trade groups is urging the White House to defend open banking and stop JPMorgan from charging fees to access customer data.
What to know:
- Ten major fintech and crypto trade associations have urged President Trump to stop big banks from imposing fees that could hinder innovation and competition.
- JPMorgan's plan to charge for access to consumer banking data may debank millions and threaten the adoption of stablecoins and self-custody wallets.
- The CFPB's open banking rule, which mandates free consumer access to bank data, is under threat as banks have sued to block it, and the CFPB has requested its vacatur.
