Hong Kong to Strengthen Digital Asset Regulation in 18 Months
Date: 2024-08-12 Author: Oliver Abernathy Categories: IN WORLD
Hong Kong is preparing to strengthen digital asset regulation over the next 18 months as it seeks to establish itself as a global fintech hub. At the annual Foresight 2024 summit, David Chiu, a member of the Legislative Council of the Hong Kong Special Administrative Region, unveiled the city’s strategic plan to attract tech talent, build new infrastructure, and implement robust regulatory oversight.
Building a robust infrastructure for digital assets
Chiu stressed that the initiative is key to the development of the tech industry in the next five to 10 years. “The digital asset industry has made significant progress in the past few years, but we are still in the early stages of development,” Chiu said. “We must establish a stable exchange system and introduce stablecoin legislation soon.”
Stablecoins, which are cryptocurrencies pegged to stable assets such as fiat currencies, are set to be introduced in Hong Kong by the end of 2024.
According to Chiu, sandbox tests have already been conducted, and the government intends to strengthen supervision and control over the legislation related to digital asset-based financial products in the next 12-18 months. The next step will be to encourage project developers to explore new innovative financial products in Hong Kong.
Stablecoin Sandbox
The Hong Kong Monetary Authority recently announced the first participants in its stablecoin sandbox on July 18. The participants include a company linked to a major Chinese online retailer, a local fintech company, and a coalition of Standard Chartered Bank, Animoca Brands, and Hong Kong Telecommunications.
Also among the participants is Jingdong Coinlink Technology, which plans to issue a stablecoin pegged 1:1 to the Hong Kong dollar.
The planned stablecoin legislation highlights Hong Kong’s financial strategy to support crypto innovation while ensuring proper regulation. On July 23, CSOP Asset Management, one of China’s largest asset managers, launched Asia’s first Bitcoin futures-based inverse product in Hong Kong.
The CSOP Bitcoin Future Daily (-1x) Inverse (7376.HK) follows the successful launch of the Bitcoin Futures ETF (3066.HK) in December 2022.
