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The Hong Kong Monetary Authority (the city-state’s central banking institution) intends to develop a new digital asset regulation system by July this year. Hong Kong is poised to follow the path of Singapore and become a cryptocurrency hub for this part of the world.
According to a recent Bloomberg report, Hong Kong’s central bank will approach the regulation of the cryptocurrency industry from three sides: it will think about the protection of local investors and rules for authorized institutions to work with digital assets, as well as a special focus on stablecoins.
The Hong Kong Monetary Authority (HKMA) wants to focus more on controlling stablecoins. In a recent press release, the agency said such assets pose “risks to the region’s monetary and financial stability.” The central bank noted that it is closely following the development of these assets and “would like to actively share” its opinion with the general public.
Eddie Yue, CEO of HKMA, said the bank is awaiting stakeholder feedback on the latest proposals. He added that the bank will develop a “pragmatic and flexible regulatory regime” for the cryptocurrency industry.
China’s Special Administrative Region currently has a so-called “opt-in” rule for local digital asset exchanges, which means they can apply for oversight. Recently, Joshua Chu, a consultant at ONC Lawyers, called this model ineffective and said the government should consider changing its policies.
In May 2021, local authorities intended to apply a rule that could only allow millionaires to trade cryptocurrencies (about 7% of the total population of the metropolis). Then Christopher Hui, the finance minister of Hong Kong, called the initiative a well-thought-out decision.
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