Hong Kong To Regulate Stablecoins in 2024, Over 80 Companies Interested

Key Points:

• Hong Kong is launching a licensing regime for VA service providers in June 2023 and working on a regulatory regime for stablecoins with the aim of implementing the relevant regulation in 2024.
• Hong Kong aims to be a leading hub for Web3 in Asia and beyond, with over 80 virtual asset-related companies expressing interest in establishing their presence there.

The Secretary for Financial Services and the Treasury, Mr. Christopher Hui, spoke at the Aspen Digital Web 3 Investment Summit about Hong Kong’s vision and strategy for supporting and promoting Web3 technologies and applications. The government is also launching a licensing regime for VA service providers that will commence operation in June 2023 and working on a regulatory regime for stablecoins with an aim to implement the relevant regulation in 2024.

He highlighted the potential of Web3 to transform how we interact with information, value, and trust on the internet, creating more decentralized, efficient, and inclusive platforms and services that empower users and creators.

Hong Kong is well-positioned to be a leading hub for Web3 in Asia and beyond, and the government is committed to supporting the virtual asset (VA) and Web3 sectors. Hong Kong’s vibrant fintech ecosystem includes over 800 fintech companies offering innovative and convenient financial services. The government issued the Policy Statement on the Development of VA in Hong Kong last year, setting out the vision and policy direction for the sustainable and responsible development of the VA sector.

The industry has well-received the policy statement, with over 80 virtual asset-related mainland and foreign companies expressing interest in establishing their presence in Hong Kong. The government is also launching a licensing regime for VA service providers that will commence operation in June 2023 and working on a regulatory regime for stablecoins with an aim to implement the relevant regulation in 2024.

Hong Kong has advanced its securities rules to allow regulated intermediaries to offer trading of eligible VA Futures ETFs to retail investors, making Hong Kong a pioneer in the Asian market. The Hong Kong Monetary Authority is working on a regulatory regime for stablecoins, and the government is collaborating with the Mainland on testing the use of digital Renminbi for making cross-boundary payments in Hong Kong. To help fintech companies expand their business globally, the government launched an online community platform in December last year to connect fintech companies with users and investors locally and globally.

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