On May 21, according to the Voice of the Greater Bay Area, the Legislative Council of the Hong Kong Special Administrative Region passed the Stablecoin Bill, which the Hong Kong Special Administrative Region Government welcomed. The Bill aims to establish a licensing system for issuers of legal currency stablecoins in Hong Kong, improve the regulatory framework for virtual asset activities in Hong Kong, maintain financial stability, and promote financial innovation.
Hong Kong Legislative Council member Wu Jiezhuang said that today is a milestone in the development of global Web3 and an important step for Hong Kong to become an international Web3 center. Some industry insiders also said that Hong Kong will usher in a critical period for the outbreak of stablecoins.
After the implementation of the Stablecoin Ordinance, anyone who issues legal currency stablecoins in Hong Kong during the course of business, or issues legal currency stablecoins in Hong Kong or abroad that claim to be anchored to the value of the Hong Kong dollar, must apply for a license from the Monetary Authority. Relevant persons must comply with the provisions on reserve asset management and redemption, including proper segregation of customer assets, maintaining a sound stability mechanism, and handling redemption requests from stablecoin holders at par under reasonable conditions. Relevant persons must also comply with a series of requirements for combating money laundering and terrorist financing, risk management, disclosure requirements, auditing and appropriateness. The Monetary Authority will make further consultations on the detailed regulatory requirements of the system in due course.
Wu Jiezhuang said that he was honored to share with everyone that the Legislative Council of the Hong Kong Special Administrative Region has passed the Stablecoin Bill in the third reading today. He believed that major institutions can apply to the Monetary Authority in Hong Kong to become compliant stablecoin issuers before the end of this year. Hong Kong stablecoins are based on legal tender as underlying assets. We welcome companies and institutions around the world that are interested in issuing stablecoins to apply to Hong Kong. I am also willing to help everyone to promote development in Asia and even the world with Hong Kong as the center.
Today's legislation was passed, which is only the first step in Web3 infrastructure. I hope to continue to work hard with everyone to promote a few points:
1. Create application scenarios: The issuance of stablecoins is the first step, and the most important thing is to create more application scenarios for stablecoins. Whether it is physical retail, cross-border trade, or trading peers, I think there is great potential space and opportunities to implement stablecoins. I call on friends from all walks of life in traditional and physical scenarios to understand and embrace stablecoins, which will be an important financial innovation.
2. Improve the stable market attributes, including releasing stablecoin interest to holders. The release of interest will help strengthen the market competitiveness of stablecoins, and also release incentives for more people to participate, so that the market share of the entire stablecoin will increase. This will help the development of stablecoins.
Catherine
Kikyo