Hong Kong’s regulations for stablecoin issuers were implemented on Friday as the government advances its aspirations for the crypto industry.
The special administrative region of China has taken measures in recent years to bolster its position within the sector, aiming to establish itself as a hub for crypto and Web3 in Southeast Asia. It developed a regulatory framework for crypto exchanges over two years ago and began deliberating on stablecoin regulations in 2023.
The legislation overseeing stablecoins, which are cryptocurrencies tied to real-world assets like the dollar, was passed earlier this year. Applications for licenses can now be submitted for the next three months, according to guidance provided by the Hong Monetary Authority (HKMA). Companies that have applied will be permitted to continue operations while their applications are reviewed, until January 31.
While approximately 40 firms were awaiting application for a stablecoin license last month, many may not succeed. The market has become somewhat “overly excited,” stated HKMA CEO Eddie Yue recently. The regulator is likely to approve fewer than 10 applications.
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