In Hong Kong, stablecoins will be subject to licensing

Recently, a meeting was held at the Hong Kong Monetary Authority on the regulation of digital assets. Representatives of the regulatory body were able to come to certain conclusions and set requirements for companies that will engage in crypto-currency activities in the administrative area.

In order for a company to legally provide services to its customers in Hong Kong, organizations will need to obtain an appropriate license to issue stablecoins. The debate on the adoption of new laws was attended not only by the Hong Kong Monetary Authority, but also by 58 organizations related to cryptocurrencies and financial transactions. The meeting was attended by representatives of companies such as Binance, Ripple Labs, MasterCard, Visa, Animoca Brands and others.

It is also worth noting that the regulatory authorities decided to ban the issuance of algorithmic stablecoins, which are essentially tied not to a real fiat currency, but to an algorithm that has no analogues in the financial market.

In the future, regulators from Hong Kong are going to conduct a thorough selection process when licensing new stablecoins. Their mandatory condition for confirmation will be binding to a real fiat currency. The Hong Kong Monetary Authority is set to enact new laws in 2023-2024.