Hong Kong’s de facto central bank on Wednesday invited comment about ways to regulate crypto assets and stablecoins with the aim of adopting a regulatory framework by 2024, in which the policy spectrum can range from no action to outright ban.
The rapid growth of cryptocurrencies and, in particular, stablecoins, or digital assets tied to traditional currencies, have attracted the attention of regulators around the world, who fear they could put the financial system at risk if not monitored. She goes.
Hong Kong Monetary Authority (HKMA) Chief Executive Ed Yu said that the global market value of crypto assets is around $2.2 trillion (approximately Rs 16257406 crore), pointing to their increasing inter-linkage with the mainstream financial system.
“We emphasize issues that may affect public trust and the security, efficiency and soundness of our payment systems and give due priority to the safety of users,” the HKMA said in a paper on the subject.
It is seeking feedback from the public and stakeholders by March 31, in a more comprehensive effort than a recent exercise by the sector’s Securities and Futures Commission (SFC), which focused only on trading platforms for virtual assets.
In its paper, the HKMA focused on the broader implications of stablecoins that can be used in payments, as well as aspects of investor protection related to crypto assets and the interface of regulated institutions with crypto assets. .
It listed five possible options for regulating crypto assets, ranging from no action to a complete ban.
The paper states that regulated institutions are required to “seriously assess” their exposure to a variety of risks and adopt risk-mitigation measures before establishing relationships with providers of crypto asset services.
The consultation comes against the backdrop of concerns among policymakers around the world that crypto assets could be used for illegal purposes, or to take advantage of unsuspecting consumers.
Such concerns stem from the complexity and volatility of cryptocurrencies, as well as from wildly differing standards around aspects of disclosure, reserves and consumer protection.
© Thomson Reuters 2021
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