Hong Kong’s main banking organization, the Hong Kong Monetary Authority (HKMA), launched a survey to evaluate popular opinion on policies for stablecoins and crypto-assets. The state-backed regulator means to develop a regulative structure by 2023-24.
HKMA’s “Discussion Paper on Crypto-assets and Stablecoins” highlights the explosive development of the stablecoin market in regards to market capitalization because 2020 and the concurrent regulative suggestions presented by worldwide regulators consisting of the United States’ Financial Action Task Force (FATF), the Financial Stability Board (FSB) and The Basel Committee on Banking Supervision (BCBS).
Market Capitalization of Crypto- properties. Source: HKMA
According to the HKMA, the existing size and trading activity of crypto-assets might not position an instant hazard to the stability of the worldwide monetary system from a systemic perspective. However, the conversation paper cautioned:
“The growing exposure of institutional investors to such assets as an alternative to or to complement traditional asset classes for trading, lending and borrowing […] indicate growing interconnectedness with the mainstream financial system.”
Market Capitalization ofMajor Stablecoins Source: HKMA.
Based on the above figure, HKMA’s paper reveals that the worldwide market capitalization stood at about $150 billion in December 2021, “representing about 5% of the overall crypto-asset market.” The regulator has actually likewise shared a list of 8 concerns to look for policy-related suggestions mentioning 5 possible regulative results– no action, opt-in program, risk-based program, catch-all program and blanket restriction:
Possible policy choices for controling crypto-assets. Source: HKMA.
HKMA anticipates stakeholders to send their actions by 31st March 2022, and objectives “to introduce the new regime no later than 2023/24.”
Major jurisdictions’ regulative position towards stablecoins. Source: HKMA.
On an end note, the regulator specified that payment-related stablecoins have a greater capacity for being included into the mainstream monetary system or perhaps daily industrial and financial activities.
As an outcome, the HKMA thinks about broadening the scope of the Payment Systems and Stored Value Facilities Ordinance (PSSVFO), a law that identifies the legality of monetary items.
Related: Hong Kong realty giant leads $90M raise for crypto bank Sygnum
Complementing the city government’s pro-crypto objectives, among Hong Kong’s biggest home designers Sun Hung Kai invested $90 million in Sygnum, a Swiss bank devoted to digital possession holding.
As Cointelegraph reported, the Series B financing round brings Sygnum’s post-money appraisal to $800 million, marking a significantly rise in combined profits from 2021.
