Hong Kong to roll out regulatory sandbox for stablecoin issuers, says financial secretary
Quick Take
- The regulatory sandbox will let issuers test out stablecoins in a controlled environment supervised by regulators, Hong Kong’s financial secretary Paul Chan said.
The Hong Kong Monetary Authority plans to introduce a regulatory sandbox for stablecoin issuers in the near future, the city’s financial secretary, Paul Chan, said during the 2024 budget announcement on Wednesday.
Chan stated in the announcement that the sandbox is designed to enable companies to test stablecoin initiatives, explore business models, and implement investor protection and risk management strategies in a controlled environment.
“Cybersecurity, alongside investor and customer protection are matters of utmost importance in web 3.0 development, embracing the principle of ‘same activity, same risks, same regulation,’” Chan added.
Last December, the HKMA and the Financial Services and the Treasury Bureau (FSTB) jointly launched a consultation on licensing requirements for stablecoin issuers. This came after Hong Kong, which has been moving to regain its position as Asia’s crypto hub, pushed out a licensing regime for digital asset trading platforms last June.
The Securities and Futures Commission of Hong Kong noted on its official website that crypto trading platforms that have not submitted license applications by Feb. 29 must shut down operations in the region by the end of May. So far, only two — OSL and Hashkey — have managed to attain operating licenses in Hong Kong.
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