The Hong Kong Monetary Authority (HKMA), the special administrative region’s central banking authority, has finalized its regulatory framework for stablecoin issuers, releasing two sets of guidelines that will take effect on Aug. 1.
On Tuesday, the HKMA released completed guidelines and consultation conclusions to clarify the upcoming rules.
The documents addressed the supervision of licensed stablecoin issuers and Anti-Money Laundering (AML) and Counter-Terrorism Financing (CTF) rules for licensed stablecoin issuers.
Alongside the finalized rules, Hong Kong will launch a public registry of licensed issuers as part of a broader push to bring oversight to the local crypto ecosystem.
“In the future, the public may refer to the register of licensed stablecoin issuers as shown on the HKMA’s website,” the regulator said.
HKMA says no licenses issued yet
“As of today, no licence has been issued by the HKMA,” the regulator said, warning the public to stay vigilant and wary of people or entities that claim to be regulated or licensed stablecoin issuers in Hong Kong.
The HKMA also warned the public of those who claim to be applying for a license. “Members of the public who hold unlicensed stablecoins are at their own risk,” the HKMA said.
On Thursday, HKMA Chief Executive Eddie Yue said stablecoin hype led to unjustified trading volume and stock price surges.
He said that it appeared to be necessary to “rein in the euphoria,” clarifying that many applying for stablecoin licenses fall short of the regulator’s standards.
Yue said some proposals were vague and lacked realistic implementation. He added that some groups that applied lacked the technical expertise to be stablecoin issuers.
Yue said only a few licenses will be issued initially as the new regulatory framework takes effect. He also warned investors to steer clear of unlicensed stablecoin offerings to avoid breaking the upcoming law.
The HKMA has encouraged market participants interested in applying for a stablecoin license to approach the regulator by Aug. 1.
The central bank said applicants must also submit their full applications by Sept. 30 to be considered in the first batch of licensees.
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Shenzhen warns against stablecoin scams
In other parts of China, stablecoin-related scams are on the rise. On July 7, authorities from Shenzhen warned citizens about illegal schemes disguised as crypto and stablecoin offerings.
The city’s government task force for illicit financial activity alerted the public to unlicensed entities advertising crypto investments.
Officials said these groups mislead investors and use the public’s limited stablecoin knowledge to offer illegal investments.
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