- Hong Kong’s planned stablecoin regulations attract major players.
- China’s Harvest Fund Management aims for cross-border payment solutions.
- The HKMA’s regulatory sandbox aims to refine supervisory standards for stablecoins.
Hong Kong’s push to establish regulations for stablecoins has garnered attention from prominent financial entities, including the international division of China’s Harvest Fund Management. This development was captured in a recent report by Bloomberg, citing sources familiar with the matter.
Per the report, Harvest Global Investments Ltd., fintech specialist RD Technologies, and crypto exchange-traded fund aspirant Venture Smart Financial Holdings Ltd. are engaged in discussions with the Hong Kong Monetary Authority (HKMA) regarding planned stablecoin trials within regulatory sandboxes.
Last month, the HKMA, the Financial Services, and the Treasury Bureau initiated a consultation on stablecoin regulations. They highlighted that the sandbox will serve to communicate supervisory standards. However, sources caution that the framework may not be finalized by March’s end, and participation in the trials is not assured for all interested parties.
Venture Smart Financial (VSFG) anticipates the sandbox will kick off in the first quarter of 2024. Rita Liu, chief operating officer of RD Technologies, stated that the company intends to participate pending regulatory approval. The fintech company aims to introduce the HKDR stablecoin for applications such as facilitating cross-border business payments.
Sean Lee, senior adviser and head of stablecoin at VSFG, asserted that a Hong Kong-dollar-referenced token could be a “powerful alternative” to its U.S. dollar-linked counterparts. Lee cited the city’s robust and well-established financial sector as backing for the sentiment.
Stablecoins, pegged 1-1 to fiat currencies and backed by reserves of cash and bonds, represent a significant portion of the $1.7 trillion digital asset market, amounting to $136 billion. While they facilitate crypto trading and lending, concerns persist regarding their stability and transparency.
Consequently, the reports claimed that jurisdictions like the European Union, Japan, Singapore, Hong Kong, and Dubai were intensifying efforts to regulate the sector, each vying to establish themselves as prominent digital asset hubs.
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