The Hong Kong Monetary Authority (HKMA) has announced the results of a discussion on cryptocurrency regulation in the administrative area. Once the law is passed, companies operating in Hong Kong will need to obtain a license to issue stablecoins.
58 companies participated in the discussion on cryptocurrency regulation in Hong Kong, including major industry players such as Binance, Ripple labs, Visa, MasterCard and Animoca. The document published by HKMA says that feedback received from them helped formulate new rules to regulate the issuance and management of stablecoins.
One of the most discussed restrictions in the bill was a ban on the issuance of algorithmic stablecoins, currencies whose peg to the fiat currency rate is provided by algorithms, and not by funds that exist in the real world. The reason for the decision was the collapse of the TerraUSD crypto project in the spring of 2022, which deprived users of tens of billions of dollars.
The regulator plans to control the peg of the coins to fiat currencies through security checks of the stablecoins of the companies that will receive a license. NKMA plans to introduce new rules for the operation of crypto companies during 2023-2024.
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