Hong Kong Regulator Canvasses Views on Rules for Crypto Assets, May Adopt Regulatory Framework by 2024

Hong Kong’s de facto central financial institution invited remark on Wednesday about methods to control crypto belongings and stablecoins, with the purpose of adopting a regulatory framework by 2024 by which the coverage spectrum might vary from no motion to a blanket ban.

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The speedy progress of cryptocurrencies and, specifically, stablecoins, or digital belongings pegged to conventional currencies, has drawn consideration from regulators worldwide, who concern they might put the monetary system in danger if not monitored.

The world market worth of crypto belongings stands at about $2.2 trillion (roughly Rs. 16,25,741 crore), pointing to their rising inter-connectedness with the mainstream monetary system, stated Eddie Yue, the Chief Executive of the Hong Kong Monetary Authority (HKMA).

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“We place emphasis on issues that may affect the public’s confidence in, and the safety, efficiency, and soundness of, our payment systems, and accord appropriate priority to the protection of users,” the HKMA stated in a paper on the subject.

It is looking for suggestions from the general public and stakeholders by March 31, in a more wide-ranging effort than a latest train by the territory’s Securities and Futures Commission (SFC) that centered solely on buying and selling platforms for digital belongings.

In its paper, the HKMA centered on the broader implications of stablecoins that could be utilized in funds, together with points of investor safety regarding crypto belongings, and controlled establishments’ interface with crypto belongings.

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It listed 5 alternatives for regulating crypto belongings, starting from no motion to a blanket ban.

Regulated establishments are required to “critically evaluate” their exposures to various kinds of dangers and undertake risk-mitigation measures earlier than organising ties with suppliers of crypto asset providers, the paper added.

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The session comes towards the backdrop of considerations amongst policymakers worldwide that crypto belongings could possibly be used for illicit functions, or to benefit from unsuspecting customers.

Such worries stem from the complexity and volatility of cryptocurrencies, in addition to wildly various requirements round points of disclosure, reserves and client safety.

© Thomson Reuters 2022

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Cryptocurrency is an unregulated digital foreign money, not a authorized tender and topic to market dangers. The data supplied within the article shouldn’t be meant to be and doesn’t represent monetary recommendation, buying and selling recommendation or some other recommendation or advice of any kind supplied or endorsed by NDTV. NDTV shall not be accountable for any loss arising from any funding primarily based on any perceived advice, forecast or some other data contained within the article.

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