The law will enter into force this year, along with public consultations at the local level.
According to a legislator, this approval is only the first step of a broader plan.
The Hong Kong Legislative Council today approved a bill that requires Stablecoins issuers to have a license from the local monetary authority (HKMA). This decision occurred to the third reading that legislators gave him.
According to a report issued by the Bill Committee, the initiative seeks to mitigate financial risks through Clear provisions on who should obtain a license, which is considered a regulated stablecointhe criteria for the granting of licenses, the sanctions for non -compliance, and the research and execution powers granted to the Central Bank.
Among other aspects, Hong Kong’s monetary authority (HKMA) will adopt an integral approach to evaluate whether a specified stable is broadcast on Hong Kong during the development of commercial activitiestaking into account aspects such as the place where the activities of the issuer, their legal domicile, the issuance processes of the Stablecoin, the administration of the reserve assets and the location of the bank accounts used to handle the cash flows are managed and daily operated.
Stablecoins emitters that aim to maintain a stable value linked to the local currency, the Hong Kong (HKD) dollar, either inside or outside the territory, They will have to meet requirements for money laundering prevention and terrorism financing. These must also comply with transparency, audit, and demonstrate aptitude and good behavior obligations.
According to communicated The Hong Kong government, the law will enter into force this year, making sure to “give enough time to understand the requirements of the licensing regime.” And the monetary authority indicated that it will make future consultations to define in greater detail its regulation framework.
Eddie Yue, executive director of the Monetary Authority of Hong Kong, said that “a pragmatic regulatory regime, flexible and risk -based regulatory has been created.” He pointed out that A solid regulatory environment will offer favorable conditions to promote the healthy, responsible and sustainable development of Stablecoins and of the digital asset ecosystem.
For his part, Christopher Hui, Secretary of Financial and Treasury Services, said that “the law not only complies with international regulatory standards, but also establishes a solid base for the Virtual Assets market in Hong Kong.” According to Hui, this “encourages the sustainable development of the industry, protects the rights and interests of users and strengthens the position of the territory as an international financial center.”
This initiative in Hong Kong is not an isolated case or the first time that the territory is advanced in the regulation of cryptocurrencies against other great economies such as the United States. In fact, last year, he approved the launch of the ETF to the cash of Ethher (ETH) before the American power did.
As cryptootics reported, Unlike continental China, Hong Kong maintains a legal framework that allows and encourages the development of cryptoactivesfunctioning as a laboratory for the implementation of new financial policies.
As happened with the approval of ETF to the cash of Ether, Ethereum’s cryptocurrency, This new law in Hong Kong could influence the United States, promoting the country to accelerate the approval of the genius lawits own legislative project to regulate the Stablcoins. This would reflect the need to stay competitive in a global market where other regions are already consolidating their leadership in financial innovation.
Johnny NG, who is part of the Hong Kong Legislative Council, has considered that the approval of this law in Hong Kong is vital for the region to strengthen as an innovation leader, as the following message published in X shows:
In what state is the genius law?
After intense debates in the Senate, the Genius bill achieved this week to overcome a procedure motion with a significant majority of 66 votes in favor and 32 against. This consensus, unprecedented in the American political framework regarding the regulation of digital assets, has been held by the industry as a key advance that could mark a before and after in the adoption of cryptoactives.
The next step for the project is to move towards a final vote in the Plenary of the Senate. If you can obtain the necessary majority at this stage, the initiative will pass to the House of Representatives for review and eventual approval. Once both Congress cameras give their approval, the proposal will be sent to the president of the United States for its signature, at which time it will become law.
The Genius law seeks to establish a regulatory framework that provides the clarity, security and trust that have been lacking in recent years in the Stablecoins sector in the United States and that have stopped their growth, especially in the midst of prolonged confrontations with organizations such as the SEC.
Such a proposal argues that the stablecoins emitters backed by the US dollar (USD) and with assets higher than USD 10,000 million will be under the direct supervision of the Federal Reserve, while smaller emitters will be subject to state regulations. In addition, it requires rigorous transparency through monthly audited reports on assets reserves, with criminal sanctions for those who present false information.
Currently, the Global Stablecoins market represents USD 248,000 million and the asset that leads most of this sector is Tether (USDT) that follows the price of the US dollar. This currency has a capitalization of USD 152,000 million.
