Hong Kong’s stubcoin licensing structure is scheduled to be made public on August 1st. This was confirmed by the Department of Financial Services and the Department of Finance, Christopher Huy.
Speaking at the Hong Kong Digital Finance Awards on July 3, Hui said the region is working to create a comprehensive virtual asset ecosystem through a careful regulatory regime that encourages market innovation.
The new regulations are central to Hong Kong’s updated digital assets agenda, Policy Statement 2.0, which was released in late June and is based on the framework since October 2022. This policy establishes the “LEAP” framework and a strategy focused on legal rationalization, expanding iconic products, advances in use cases, and developing people and partnerships.
Under the upcoming Stablecoin ordinance, any entity that issues Fiat referenced Stablecoins in Hong Kong must obtain a license from the Hong Kong Monetary Authority (HKMA). As detailed in the official government documents, the key rule is the requirement that stubcoins be fully supported by the reserves of high-quality liquid assets. This measure is designed to protect investors and ensure financial stability.
The promotion of the regulated stubcoin market focuses on real-world assets (RWA) tokens. According to OpenGov Asia, the government plans to normalize the issuance of tokenized government bonds, promote the symbolism of other assets such as precious metals, and improve liquidity and market access. In support of this, Financial Services, the Ministry of Finance Bureau, and HKMA are conducting legal reviews to streamline the regulatory process for tokenized equipment.
To further develop the market, the authorities have clarified the stamp mandatory treatment of tokenized ETFs and drafted regulations regarding tax incentives for profits from certain blockchain activities to encourage secondary market transactions.
Large tech companies like ANT Group have already signaled their intention to apply for a ridiculous issuance license after the new scheme is active.
Discover more from Earlybirds Invest
Subscribe to get the latest posts sent to your email.
