Hong Kong Authorities Announce New Regulations and Licensing Terms for Stablecoins!

The Hong Kong authorities have proposed the adoption and regulation of fiat-stable currencies (FRS). According to the document, the Financial Services and Treasury Bureau (FSTB) and the Hong Kong Monetary Authority (HKMA) will allow retail investors to purchase stablecoins, but will state that their issuers must obtain a special local HKMA license.

To obtain a license, companies must fully support all stablecoins in circulation with reserves equal to face value, segregation and custody of reserves, and regular reporting. They will also need to open an office in Hong Kong with a CEO, senior management team, and key personnel. However, Algorithmic Stablecoin Issuers will not be able to obtain licenses.

In May, Hong Kong’s Securities and Futures Authority (SFC) made the decision to officially allow retail investors to trade cryptocurrencies. The SFC will allow retail investors to sell Bitcoin** (BTC) and Ether (ETH), while being subject to strict security measures. For retail trading, cryptocurrencies must not have experienced a “bad event” for 12 months. In addition, cryptocurrencies must be included in at least two indices.

In addition, in December, the SFC announced that it was ready to accept applications to launch cryptocurrency ETFs. The joint statement emphasizes that the institutions are reviewing their current rules and policies regarding companies and brokers who want to participate in cryptocurrency.

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