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During the 2024 budget announcement on Wednesday, Hong Kong’s financial secretary, Paul Chan, revealed the Hong Kong Monetary Authority’s (HKMA) plans to establish a regulatory sandbox specifically for stablecoin issuers in the near future.
Chan explained that the sandbox’s purpose is to provide a controlled environment for companies to test stablecoin initiatives, explore diverse business models, and implement strategies for investor protection and risk management. He stressed the importance of prioritizing cybersecurity, investor protection, and customer safety in the development of web 3.0, emphasizing the principle of ‘same activity, same risks, same regulation.’
In December of the previous year, the HKMA and the Financial Services and the Treasury Bureau (FSTB) collaborated to initiate a consultation on licensing requirements for stablecoin issuers. This move followed Hong Kong’s efforts to reclaim its position as Asia’s cryptocurrency hub, which included the implementation of a licensing regime for digital asset trading platforms in June.
The Securities and Futures Commission of Hong Kong, as outlined on its official website, stated that cryptocurrency trading platforms failing to submit license applications by February 29 must cease operations in the region by the end of May. Presently, only two platforms, OSL and Hashkey, have successfully obtained operating licenses in Hong Kong.
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