🎉 Hong Kong🇭🇰: the regulator will issue the first licenses for the issuance, management, and redemption of stablecoins starting in March

🎉 Hong Kong🇭🇰: the regulator will issue the first licenses for the issuance, management, and redemption of stablecoins starting in March

Access to the new licensing regime will be restricted to verified applicants that meet stringent standards for risk management, anti-money laundering (AML) and adequate reserve backing, according to CryptoNews.

➡️ The competent authority is the Hong Kong Monetary Authority (HKMA), which holds broad supervisory powers, including the ability to impose additional licensing conditions, revoke licenses, and appoint administrators when deemed necessary.

➡️ The primary requirement for issuing, managing, and redeeming stablecoins is that issuers maintain full 1:1 reserve backing with high-quality liquid assets, under agreements with approved custodians.

➡️ Issuers must honor redemption requests at par value within one business day, and are not permitted to pay interest to stablecoin holders.

➡️ Issuers must be locally registered or duly authorized entities, with boards of directors that include independent directors responsible for regulatory compliance.

➡️ The licensing regime applies to local stablecoin issuers as well as foreign token issuers pegged to the Hong Kong dollar. In the first round, 36 applications are under review.

➡️ Bank of China Hong Kong has already applied, while Ant Group is in the process of obtaining “verified” candidate status. HSBC and ICBC have not been approved at this stage.

➡️ Regulatory context: Hong Kong already operates a licensing framework for virtual asset trading platforms, overseen by the Securities and Futures Commission (SFC). To date, 11 platforms have been authorized, including OSL, HashKey, and Bullish

➡️ Additional note: Hong Kong’s stablecoin regulatory framework came into force in August of last year and is currently regarded as one of the most advanced globally, both in scope and regulatory rigor

#news #Asia #China #crypto

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