Rushed stablecoin audit rules could 'kill' industry, chief of Hong Kong's accounting regulator says

Hong Kong’s stablecoin sector is still at an early stage, and rushing to impose detailed auditing standards now could risk “killing the industry,” said the city’s accounting regulator.

Comprehensive guidelines on stablecoin auditing are unlikely to be introduced for another one to three years, the Accounting and Financial Reporting Council chairman David Sun Tak-kei told The Standard’s sister publication Sing Tao Daily. 

Under Hong Kong’s newly effective Stablecoin Ordinance, licensed issuers are required to undergo annual independent audits to ensure transparency and compliance. Sun said the AFRC may only play an indirect role in regulating the sector, and emphasized that rules should evolve in step with the industry’s maturity rather than being frontloaded.

He compared the expected approach to Hong Kong’s rollout of digital bank licenses, which followed a gradual, cautious regulatory path. “No company has even been licensed yet, so it’s too early to be debating stablecoin audit oversight,” he added with a laugh.

Sun stressed that integrity and independence remain the accounting profession’s core principles, ensuring that auditor reports are trusted and free from outside influence.

Separately, Sun revealed the AFRC’s probe into the PwC-Evergrande incident is broader than similar inquiries in China and is expected to take longer to conclude.