Hong Kong Financial Secretary: Planning to establish a regulatory framework for stablecoins this year, conducting second round of public consultation

The Financial Secretary and Secretary for Financial Services and the Treasury of Hong Kong, Christopher Hui, stated in the latest fintech development symposium that this year they will formulate a regulatory framework for "stablecoins" for which the supervisory work on virtual assets in the upper phase has not been completed yet. Due to the current regulatory content in Hong Kong, licensed exchanges are not allowed to trade stablecoins. If this framework is established, it will benefit compliant operators in Hong Kong.

Hong Kong is committed to promoting the sustainable development of Web3 and launched a stablecoin public consultation this year

The Financial Secretary of Hong Kong, Paul Chan Mo-po, reported on the latest developments and measures in the fintech sector in Hong Kong and the progress of regulatory work on virtual assets.

The report stated that to seize the opportunities brought by Web3 development, the Financial Secretary of Hong Kong will establish a dedicated team to provide recommendations on how to promote sustainable and responsible development of the Web3 industry.

As the new regulatory framework that came into effect on June 1 does not yet have regulations related to stablecoins, Paul Chan Mo-po has stated that the Hong Kong Monetary Authority is formulating a regulatory framework for "stablecoins" and plans to conduct a second round of public consultation within this year.

Hong Kong's fintech development comprehensive, attracting talents to join

The report shows that Hong Kong currently has over 800 fintech companies offering various innovative and convenient financial services, including mobile payments, cross-border remittances, blockchain, virtual banks, virtual insurance, and virtual asset trading. The development of fintech has also attracted a large number of talents to the industry. Cyberport and Hong Kong Science Park currently have approximately 6,000 fintech employees, and this number is expected to continue growing, providing more development opportunities for talents in Hong Kong and abroad.

Hong Kong values the development of virtual assets and strengthens regulation

The report claims that the Hong Kong government highly values the development of virtual assets. Last October, the Hong Kong government issued a virtual asset policy statement outlining the government's vision and policy principles. The industry has responded positively, with many mainland and overseas companies expressing interest in developing in Hong Kong, which helps build the Web3 ecosystem and nurture related talents. The Securities and Futures Commission of Hong Kong announced regulatory requirements last month, and the licensing regime has been effective since this month. Key points of Hong Kong's regulation include a heavy responsibility on exchanges to protect retail investors, and a temporary ban on trading stablecoins.

Paul Chan Mo-po stated that investor education will be strengthened to help investors understand how the licensing regime works and the key points to note when investing in virtual assets.

Hong Kong provides financing channels to cultivate fintech talents

The report states that Hong Kong, as a major global financial center, has been committed to optimizing its listing system to assist various enterprises, including tech companies, in raising funds in Hong Kong. The Hong Kong Stock Exchange introduced a new listing regime in 2018, allowing emerging and innovative companies with different voting rights structures, as well as biotech companies without revenue or profit, to list in Hong Kong, expanding the funding channels for new economy companies in Hong Kong.

In addition, the Hong Kong Stock Exchange has implemented a Specialist Technology Companies listing regime to facilitate profitable specialist tech companies that do not meet the main board eligibility requirements to list and raise funds. The Hong Kong Stock Exchange is also carefully considering market feedback and will commence consultations this year on proposed GEM reform suggestions.