At the World Economic Forum in Davos, Switzerland, Hong Kong Finance Minister Paul Chan Moo-po announced the region’s plan to issue licenses to stablecoin providers in the first quarter of this year as the city seeks to strengthen its position as a leading fintech hub.
Hong Kong’s regulatory framework
Chan Highlight Hong Kong’s regulatory framework for digital assets, describing it as “responsible and sustainable.” He stressed the importance of a balanced approach to supporting the growth of both finance and technology, noting that these two sectors “reinforce each other.”
Chan explained the benefits of digital assets, noting that they can enhance transparency, improve risk management, and facilitate more efficient movement of capital. “We view digital assets as a financial innovation that we must proactively embrace,” he said.
The Minister of Finance explained the need to ensure this Digital assets Serving the real economy while simultaneously implementing strong guardrails to mitigate risks associated with financial stability, market integrity, and investor protection.
He reaffirmed the principle of “same activity, same risk, same regulation”, which aims to promote a healthy, responsible and sustainable environment for digital asset development. He stressed that the government and regulators will act as “market enablers,” setting a precedent for innovation.
First Stablecoin licenses coming soon
Over the past two years, Hong Kong has prioritized strengthening its position as a fintech hub, especially in light of US efforts to realize President Donald Trump’s vision of making the country a fintech hub. Global Cryptography Centre.
Chan noted that since 2023, the city has issued three batches of token green bonds with a total value of $2.1 billion. In addition, Hong Kong has already established a licensing framework for virtual asset trading platforms.
Notably, last November, the Hong Kong Monetary Authority (HKMA) launched a controlled pilot program to facilitate real-value transactions using token deposits and digital assets.
During his remarks, Chan specifically mentioned the upcoming licensing system for stablecoins, noting that the first batch of licenses is expected to be issued soon.
According to reports from the Hong Kong Financial Supervision Authority receive Official stablecoin license applications from 36 institutions by September 30, roughly half of the 77 expressions of interest registered in August.
Applicants for these licenses include a variety of entities, such as banks, technology and securities companies, asset management companies, e-commerce platforms, payment service providers and Web3 startups.
A spokesperson for the Hong Kong Monetary Authority stated that the authority will carefully review all submitted materials and conduct approvals in line with the new Stablecoin Law and relevant regulatory requirements.
While the Hong Kong Monetary Authority aims to announce the first batch of licensed stablecoin issuers between the first and second quarters, it has advised that the licensing process will be stringent, with only a limited number of licenses granted during this initial phase.
Featured image from OpenArt, chart from TradingView.com
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