- Proposed regulations aim to align virtual asset custodians with international standards for secure digital asset custody.
- New legislation will introduce a licensing system for fiat currency stablecoin issuers, enhancing market security.
The Hong Kong government is set to refine the regulation of virtual asset transactions, with Chen Haolin, the Undersecretary for Financial Services and the Treasury, announcing a planned completion of a second public consultation on over-the-counter (OTC) virtual asset transactions next year. This initiative is aimed at establishing a more structured and predictable regulatory environment for digital assets.
As part of this regulatory enhancement, the government will also propose new regulations for virtual asset custodians next year to ensure these entities meet international standards for the safe custody of digital assets.
These steps are in line with the government’s objective to create a transparent and secure regulatory framework that supports financial innovation while protecting investors.
By the end of this year, legislation will be presented to the Legislative Council to introduce a licensing system for issuers of fiat currency stablecoins. This proposed system is intended to provide a secure framework for this specific segment of the virtual asset market, addressing both market stability and investor protection.
In June of the previous year, Hong Kong implemented a licensing system for virtual asset trading platforms, a move described by Haolin as a pivotal development. This system established basic regulatory standards for the operation of these platforms within the region.
Furthermore, Haolin noted the strategic advantage Hong Kong holds due to numerous financial institutions establishing their regional headquarters or significant operations in the city.
This strategic positioning benefits third-generation internet companies (Web 3) operating in Hong Kong, providing them easy access to a large pool of clients, investors, and business partners.
This access positions Hong Kong as a favorable location for launching and expanding financial technology enterprises.
These regulatory initiatives and the strategic placement of financial operations underscore Hong Kong’s commitment to strengthening its role as a global center for financial technology and virtual asset operations, ensuring a balance between innovation and regulatory oversight.
The post Hong Kong Plans To Complete Second Public Consultation On OTC Virtual Asset Transactions Regulation By Next Year appeared first on ETHNews.
