Hong Kong Regulator Rejects Position on Crypto Asset Rules, Possible Regulatory Framework in 2024

Hong Kong’s de facto central bank invited comment on Wednesday on ways to regulate crypto assets and stablecoins, with the aim of adopting a regulatory framework by 2024 within which policy scope could be from inaction to total ban.

The rapid growth of electronic money and special, stablecoins, or digital assets pegged to traditional currencies, have attracted attention from regulators worldwide, who fear they could put the financial system at risk if left unchecked. monitor.

Eddie Yue, CEO of the Hong Kong Monetary Authority (HKMA), said that the global market value of crypto assets is around $2.2 trillion (approximately Rs 16257406), indicating a correlation increasingly linked to the formal financial system.

“We highlight issues that may affect public trust and the safety, efficiency, and soundness of our payment system,” the HKMA said in an article on the subject. give appropriate priority to user protection”.

It is seeking feedback from the public and stakeholders by March 31, in a broader effort than the Securities and Futures Commission (SFC)’s recent exercise. territory focuses only on trading platforms for virtual assets.

In its article, the HKMA focuses on the broader implications of stablecoins that can be used in payments, along with investor protection aspects related to crypto assets and the interface of institutions managed with crypto assets.

It listed five possible options for regulating crypto assets, ranging from inaction to a general ban.

Regulated organizations are required to “seriously assess” their exposure to different types of risks and put risk mitigation measures in place before establishing relationships with suppliers. provide crypto-asset services, the article added.

The consultation comes amid concern among policymakers around the world that crypto assets could be used for illicit purposes or to take advantage of unsuspecting consumers.

Such worries stem from the complexity and volatility of cryptocurrencies, as well as wildly different standards around aspects of disclosure, storage, and consumer protection.

© Thomson Reuters 2021

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