On Tuesday, Hong Kong Monetary Authority (HKMA) published advice for the granting of stable licenses, describing strict standards on capital, reserve, governance and technology for issuers seeking to operate on the city’s regulated digital asset market.
The guidelines also covered the rules on money laundering and the transitional measures for existing stable transmitters. Stablecoins are digital assets that are fixed to other assets such as fiduciary currency.
The HKMA Stablecoin scheme is expected to take effect on Friday and a bill on the rules for the sector was adopted in May. Already 40 companies are waiting to request a Stablecoin license, although the regulator should approve less than 10 requests initially. Last week, the CEO of HKMA, Eddie Yue, warned companies not to be too enthusiastic about the upcoming regulatory scheme, especially if their business is not linked to stablecoins.
The regulator wants to adopt a cautious approach as indicated in its consultation conclusions on money laundering. Emitters must still prove that they can effectively alleviate money laundering, HKMA said in its article.
Unless a License Stalcointes transmitter can prove that it can effectively mitigate the risk of money laundering, he must check the identity of each holder of the Stabtives reserve “even if the holder does not have a customer relationship with the licensee,” said the response document to the HKMA consultation. The document also pointed out that suppliers of supervised virtual asset service or a reliable third party can also verify the identity of its stablecoin holders.
Hong Kong also has a license regime for cryptographic companies and began to allocate licenses last year.
“HKMA will continue to assess the efficiency and relevance of these measures, among others, considering the changing regulatory landscape,” the regulator said in his consultation response on Tuesday.
Stablecoin transmitters that are fully prepared must apply by the end of September, said the HKMA press release.
A realistic calendar to begin to allocate licenses is at the beginning of next year, Darryl Chan Wai-Man, Deputy Managing Director of HKMA, told South China Morning Post on Tuesday speaking of the stable regime of the region.
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Update and correction (July 29, 18:21 UTC): Add details throughout the directives and context of the South China Morning Post at the bottom. Also corrects history to say that HKMA wants companies fully ready to apply by the end of September, said a previous version at the end of August.
