Hong Kong's central bank unveils plans for new crypto regulation in July 2022
|- The Hong Kong Monetary Authority has unveiled plans for a new regulatory regime, revealing ties with crypto hub Singapore.
- The de facto central bank would implement the regulation in stablecoins, investor protection and institutional investments in cryptocurrencies.
- Regulators in Hong Kong are wary of volatility and scams in the crypto ecosystem.
Hong Kong's de facto central bank, the Monetary Authority, has revealed plans for introducing new crypto regulation in July of this year. Regulators in Hong Kong are keen to introduce norms for investor protection.
Hong Kong central bank gears up for crypto regulations in 2022
Hong Kong Monetary Authority, the de facto central bank, has new plans for cryptocurrency regulation. The central bank plans to unveil them in July 2022. The monetary authority has decided to approach the crypto industry on three different verticals: stablecoins, investor protection and institutional investments.
Commenting on the upcoming regulation, HKMA was quoted recently:
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 central bank is seeking feedback from stakeholders and investors by March 31, 2022. In their recent paper, the bank focuses on the utility of stablecoins and the implication of accepting them for payments.
Regulators are wary of the volatility associated with cryptocurrency prices. Regulators worldwide have shifted towards increased oversight of the crypto industry due to the rising frequency of scams.
Therefore, the central bank of Hong Kong has adopted "same risk, same regulation" in crypto. The bank is keen on protecting users from financial instability as cryptocurrency's connections with traditional institutions increase from a regulatory perspective.
The regulation comes when policymakers around the world are drafting regulations and policies to stop the use of cryptocurrencies for illicit purposes.
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