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Hong Kong Released Crypto-Asset Regulatory Plan -Breaking

by Mike Robinson

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Hong Kong has released a Crypto-Asset Regulation Plan

Hong Kong’s Monetary Authority (HKMA) released a discussion paper on crypto-asset and stablecoin regulation that will be implemented by 2024.

The rapid adoption and growth of cryptocurrencies requires a ruling to ensure that the financial system is not at risk. The regulation will help to improve Hong Kong’s financial stability.

“We place emphasis on issues that may affect the public’s confidence in, and the safety, efficiency, and soundness of, our payment systems, and accord appropriate priority to the protection of users,”
It is stated in the document.

The paper said that stablecoins are already being developed for store value and everyday payments, “thus having a higher potential for being incorporated into the mainstream financial system across the globe.”

Due to the uncertainties surrounding cryptocurrency, we will closely monitor the development of digital assets that are not related to payments.

The HKMA recommends a risk-based approach to payment-related stablecoins. The authorities listed many risks related to cryptocurrency including financial and financial instability, settlement problems, user protection risk, regulatory arbitrage, international compliance and financial crime.

“Bringing crypto-assets within the regulatory perimeter in an appropriate manner would help address the various risks posed to users and the financial system while embracing the potential benefit of financial innovations.

There are many regulatory bodies around the world who have started the process. The HKMA is of the view that adopting a risk-based approach would be the most suitable way to take things forward,”
The paper is the conclusion of the HKMA.

The Flipside

  • Complexity and volatility are two of the biggest concerns regarding cryptocurrency. The document states that Hong Kong has established regulations for consumer protection.

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