Hong Kong to introduce stablecoin bill to regulate virtual token, protect stability

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The government published the Stablecoins Bill in the gazette on December 6; first reading in the Legislative Council set for December 18

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If passed, the Hong Kong Monetary Authority will be empowered to supervise, investigate and enforce the regulatory regime. Photo: Shutterstock Images

Aileen Chuang

Published: 7:44pm, 6 Dec 2024Updated: 7:45pm, 6 Dec 2024

The Hong Kong government has published a stablecoin bill in the gazette, taking the proposed regulatory regime a step closer to legal force, as the city moves to balance financial stability and consumer protection while promoting its agenda on virtual assets.

The publication follows the public consultation between the city’s financial affairs office, the Hong Kong Monetary Authority (HKMA) and industry participants in July. Three stablecoin issuers were admitted in July to test its usage in different scenarios.

The proposed regulatory regime will require any person to be licensed by the HKMA before they are allowed to issue fiat-referenced stablecoins and [other] tokens that purport to maintain a stable value with the Hong Kong dollar. Licenses are also needed for actively marketing the issue of such tokens to the public, it said in a statement.

The HKMA will be empowered to conduct the necessary supervision, investigation and enforcement for effective implementation of the regime.

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The Stablecoins Bill will be introduced into the Legislative Council for a first reading on December 18, the government said.

“The legislative proposal is essential for Hong Kong in fulfilling our obligations as a member of the Financial Stability Board,” Christopher Hui Ching-yu, Secretary for Financial Services and the Treasury, said in a statement. “This risk-based proposal aims to promote a robust regulatory environment, which is in line with Hong Kong’s approach to virtual-asset development.”