Hong Kong Monetary Authority aims to oversee stablecoin reserves
Hong Kong Monetary Authority issued a report that it will set up an independent committee to oversee digital assets, including cryptocurrencies. The Committee is charged with the responsibility of ensuring Hong Kong’s position as one of the leading financial centers and maintaining its status on international exchanges.
The “hkma to introduce regulatory framework for stablecoins” is a news article that says the Hong Kong Monetary Authority aims to oversee stablecoin reserves. The HKMA will be introducing a regulatory framework for stablecoins in 2019.
The Hong Kong Monetary Authority (HKMA), Hong Kong’s central bank, desires to oversee stablecoin supply and reserve management.
On January 12, the HKMA released a discussion paper on cryptocurrencies and stablecoins that included its opinions on how the sector ought to be governed in Hong Kong.
The HKMA specifically addressed “payment-related stablecoins” in the 34-page consultation paper, noting that in December, the market valuation of all stablecoins reached $150 billion, or 5% of the whole cryptocurrency market. All stablecoins now in existence, including Tether (USDT) and USD Coin, are “primarily asset-linked and largely pegged,” according to the regulator (USDC).
According to HKMA, “the worldwide regulatory community is paying close attention to the fast growth of crypto-assets, notably stablecoins, since it offers potential hazards regarding monetary and financial stability.”
HKMA proposed to create a single regulator to oversee organizations engaged in both regulating and conducting activities, such as producing stablecoins and maintaining their reserves, and put out eight primary policy orientations in order to effectively manage related risks. In addition, the authority intends to control stablecoin transactions’ validation procedures, private key maintenance, and transaction execution.
To ensure that the regulatory framework takes comments into consideration, the HKMA noted that it “encourages present or potential actors in the stablecoins ecosystem to reply to this document and provide relevant thoughts to us.” By 2023 or 2024, the agency hopes to adopt new legislation after completing its current tasks.
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The HKMA is not the first financial authority considering actions to control the expanding stablecoin market due to the dangers involved. A study on potential “stablecoin runs” and “payment system threats” was released in November 2021 by the U.S. President’s Working Group on Financial Markets. The U.S. Treasury then made a December hint about new stablecoin-focused rules.
The “imf cryptocurrency” is a type of currency that has been created by the International Monetary Fund. The Hong Kong Monetary Authority aims to oversee stablecoin reserves.