Hong Kong Regulator Examines Views on Crypto Asset Rules | Hong Kong

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HONG KONG – The Hong Kong Monetary Authority has requested comments on ways to regulate crypto assets and stablecoins, with the goal of adopting a regulatory framework by 2024 in which the range of policies could range from lack of action to a general ban.

The rapid growth of cryptocurrencies and, in particular, stablecoins, or digital assets pegged to traditional currencies, has caught the attention of regulators around the world, who fear putting the financial system at risk if they are not. not monitored.

We focus on issues that may affect public confidence in our payment systems, as well as the safety, efficiency and soundness of our systems, and give appropriate priority to the protection of users.

HKMA

The global market value of crypto assets stands at around $ 2.2 trillion, indicating their growing interconnection with the traditional financial system, said Eddie Yue Wai-man, managing director of HKMA.

“We focus on issues that may affect public confidence in our payment systems, as well as the safety, efficiency and soundness of our systems, and give appropriate priority to the protection of users,” said HKMA said in an article on the subject.

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It is seeking comments from the public and stakeholders by March 31, as part of a larger effort than a recent exercise by the Territory’s Securities and Futures Commission that focused solely on trading platforms. of virtual assets.

In its article, the HKMA focused on the broader implications of stablecoins that can be used in payments, as well as investor protection aspects related to crypto assets and the interface of regulated institutions with the assets. cryptographic.

He listed five possible choices for regulating crypto assets, ranging from no action to a blanket ban.

Regulated institutions are required to “critically assess” their exposures to different types of risk and adopt risk mitigation measures before establishing links with crypto asset service providers, the document added. .

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The consultation comes against the backdrop of concerns from policymakers around the world that crypto assets could be used for illicit purposes or to take advantage of unsuspecting consumers.

These concerns stem from the complexity and volatility of cryptocurrencies, as well as the widely varying standards around aspects of disclosure, reservations, and consumer protection.

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