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Hong Kong to Set a Plan for Cryptocurrency Regulations by July 2022: Report

The HKMA plans to outline a regulatory framework for local businesses and traders by July 2022 as it would pay special attention to stablecoins.

The Hong Kong Monetary Authority (the central banking institution of the city-state) reportedly intends to establish a new regulatory regime for digital assets by July this year. The special administrative region of China is willing to follow Singapore’s path and become a cryptocurrency hub for that part of the world.

Hong Kong’s Regulatory Framework Coming This Summer

According to a recent coverage by Bloomberg, Hong Kong’s central bank will approach the cryptocurrency industry from three aspects: protection for local investors, comprehensive rules for authorized institutions on how to deal with digital assets, and special attention to stablecoins.

The Hong Kong Monetary Authority (HKMA) is willing to put stablecoins under enhanced scrutiny. In a recent press release, the institution said such assets present “possible risks regarding monetary and financial stability.” The central bank noted it had been closely monitoring the development of these assets and “would like to proactively share” its views with the broader society.

Mr. Eddie Yue – Chief Executive of the HKMA – revealed the bank is waiting for feedback from stakeholders on the recent proposals. He added that it will draw up a “risk-based, pragmatic, and agile regulatory regime” for the cryptocurrency industry.

Currently, the special administrative region of China employs a so-called “opt-in” rule for local digital asset exchanges, meaning they can apply to get supervised. Not long ago, Joshua Chu – a consultant at ONC Lawyers – described this model as ineffective, and the government should consider changing its policy.

In May 2021, the local authorities intended to apply a rule that could allow only millionaires to trade with cryptocurrencies (around 7% of the total population of the megapolis). Back then, Christopher Hui – Hong Kong’s Treasury Secretary – called this initiative a well-thought decision.

The Problem with Coinsuper

Last week, the cryptocurrency exchange Coinsuper became one of the hottest topics in the city-state since dozens of its clients complained they can not withdraw funds. Some affected users have even contacted the police to seek a solution.

Executives of Coinsuper could not be located to give more details on the matter. At the same time, the administrator of the company’s Telegram chat stopped responding to queries about failed transactions over a month ago.

Despite all these issues, the trading application and the website of Coinsuper are still functional.