Hong Kong is outlining detailed regulation on stablecoin after a public consultation. The authorities aim to introduce a bill within the year, with a focus on robust regulations and protections for users.
Let’s see all the details below.
Hong Kong regulation: the regulatory path towards stablecoin legislation
As anticipated, Hong Kong is progressing towards a comprehensive regulation of fiat stablecoins after concluding the public consultation phase.
The Financial Services and Treasury Bureau (FSTB) and the Hong Kong Monetary Authority (HKMA) have announced the results of the consultations and outlined the next steps for the legislative process.
The consultation document, published last year and with 108 contributions from stakeholders, has informed the proposta di legge imminent.
According to the regulatory authorities, the regulatory regime will focus on stablecoin that operate on decentralized ledgers, limiting unilateral control over their functionality.
One of the crucial points is the obligation for stablecoin issuers to obtain a license, with the possibility of maintaining reserves in authorized banks in Hong Kong or in other jurisdictions.
Foreign entities will need to establish a local presence and have key personnel in the territory to be eligible to apply for a license.
The HKMA has also expressed the intention to reduce the frequency of public disclosures compared to the initial proposal, instead proposing a monthly attestation model by an independent auditor.
They will continue to discuss this and other related issues in the process of finalizing the legislation.
These developments reflect Hong Kong’s efforts to remain globally competitive as a hub for criptovalute.
With the recent entry into force of the European regime MiCA and the ongoing legislative developments in the United States, Hong Kong is strategically positioning itself in the emerging financial technologies sector.
To further promote innovation in the sector, the HKMA has established a regulatory sandbox for stablecoin issuers, offering immunity to test new operations.
Further details on the procedures to access this sandbox will be announced soon.
In conclusion, Hong Kong is outlining a comprehensive and modern regulatory framework for stablecoins, aiming to balance innovation with the safety and protection of investors and end users.
Three fraudsters arrested in Hong Kong for a Tether theft and possession of counterfeit banknotes
The police of Hong Kong have arrested three individuals accused of stealing Tether (USDT) worth 3.11 million HK$ (400,000 USD) and of having seized nearly 11,000 counterfeit banknotes in their offices.
The suspects, exploiting a scam, had convinced a 44-year-old entrepreneur to convert his USDT. During the operation, they had shown the unfortunate person bundles of money, assuring him that he would receive that cash in exchange for the cryptocurrency.
The man, trusting, transferred the USDT into the scammers’ cryptographic wallet.
However, according to a source close to the case who spoke with the South China Morning Post, the banknotes were mostly fake, with only two genuine ones on the top and bottom of each bundle.
The source added that, after the transfer, the scammed person asked to examine the banknotes, but the employees refused, claiming they had not received permission from the store manager.
The man reported the incident to the police last Friday. On Monday, the authorities raided the suspects’ offices, seizing 10,978 fake 1,000 Hong Kong dollar bills.
These banknotes, although similar to the authentic ones, had the inscription “coupon di pratica” in Chinese and lacked the security watermarks.
The police have arrested a 42-year-old woman, a 24-year-old man, and another 40-year-old man. Specifically accusing them of obtaining property by deception and possession of counterfeit banknotes.
The three were also questioned regarding similar cases of scams related to cryptocurrency conversion.
If found guilty, they face up to 10 years in prison for the charge of fraud and up to 14 years for possession and use of counterfeit banknotes.