The Hong Kong Monetary Authority warned public against investing in digital currencies amid local media reports that a bitcoin exchange had run off with $387M in client funds.
US dollar-pegged stablecoins have an undeniable dominance of the stablecoin market. This has raised concerns among industry players who feel that an HKD stablecoin may not be necessary after all.
Regarding custody arrangements, the SFC emphasizes that the fund’s trustee or custodian can delegate its crypto custody function solely to an SFC-licensed VATP or entities meeting the crypto custody standards set forth by the HKMA.
The e-HKD program has taken a three-rail approach for the potential implementation of the virtual currency: foundation layer development, industry pilots and iterative enhancements, and full launch.
The Hong Kong Monetary Authority (HKMA) recently completed a public consultation on stablecoins regulations.
According to BIS research, 93% of central banks across the world are investigating the feasibility of issuing CBDCs.
The new development aligns with the country’s ambition to become a prominent global hub for crypto.
A high-ranking Hong Kong official has warned crypto exchanges to expect strict regulation and advises those in opposition to go elsewhere.
Considering the influence of the US markets, other Asian banking regulators including the MAS have affirmed that the Swiss firm’s takeover will have no material impact on retail customers.
The Hong Kong regulator HKNA noted that algorithmic stablecoins like TerraUSD won’t be entertained as part of the region’s new stablecoin legislation.
The HKMA aims to deliver the initial view of e-HKD by the middle of next year. The published whitepaper covers the research methodology and technical realization of the financial solution.