Hong Kong to Regulate Stablecoins from August 1st for Efficient Cross-Border Payments

Christopher Hui, the Secretary for Financial Services and the Treasury of the Hong Kong Special Administrative Region Government, highlighted the transformative potential of stablecoins in capital markets. In a recent blog post, Hui emphasized that financial technology, particularly stablecoins, holds significant promise in addressing long-standing issues in cross-border payments, such as slow processing times and high costs. This innovation aims to better serve the real economy by enhancing efficiency in the payment sector.

The "Digital Asset Development Policy Declaration 2.0" released by the government underscores the importance of promoting application scenarios and cross-sectoral cooperation. One of the key pillars of this declaration is the recognition of stablecoins as a viable alternative to traditional financial systems. Stablecoins offer cost efficiency and have the potential to revolutionize payment and capital market activities, including cross-border transactions. The regulations governing stablecoins are set to take effect on August 1st, marking a significant step towards integrating this technology into the financial landscape.

The Hong Kong SAR Government, along with financial regulators, is committed to creating a favorable market environment for stablecoins. This will be achieved through necessary regulatory measures designed to encourage issuers to explore and promote the application of stablecoins in various scenarios. The goal is to alleviate substantial pain points in enterprise operations and improve the daily lives of citizens by leveraging the benefits of stablecoins. This proactive approach reflects the region's dedication to fostering innovation and enhancing the efficiency of its financial systems.