Hong Kong to detail stablecoin regulation next week: regulator

Hong Kong’s financial regulator said it will release a summary for the stablecoin licensing regime next week. 

The document will detail the arrangements for the Hong Kong Monetary Authority to accept and process license applications, its chief executive Eddie Yue Wai-man said. 

Yue wrote in an article that central banks and financial regulators around the world are focusing on the inherent and spillover risks of stablecoins, including their impact on traditional financial markets and banks. 

However, the greater concern lies in preventing their misuse by criminals for money laundering, especially in cross-border scenarios, he said.

The HKMA has already consulted the market on two sets of guidelines—one for regulatory implementation and one for anti-money laundering (AML). 

The authority is now making appropriate adjustments based on the feedback and aims to publish the final version by the end of this month, he said.

Yue expects the final guidelines will not differ significantly from the consultation drafts, and noted that stricter AML requirements will be introduced to ensure the stablecoin market in Hong Kong develops in an orderly and healthy manner.

STAFF REPORTER