Until official laws are launched by the finish of 2024, Hong Kong will not license person traders to trade stablecoins.
Hong Kong has not but granted a license to trade stablecoins
At a time when Hong Kong is strengthening its presence to turn into a cryptocurrency-pleasant nation for person traders, 1 authority is “pouring cold water” on it.
In an on the net committee meeting held on October six, 2023, Hong Kong Minister of Financial Services and Finance Christian Hui explained that Hong Kong even now has no official laws for stablecoins like Tether (USDT). ) or USD Coin (USDC), this indicates person traders will not be permitted to trade these assets.
Hong Kong officials have stated that retail trading of stablecoins will not be permitted until eventually the stablecoin policy is launched (potentially upcoming yr) In addition to BTC and ETH, new cryptocurrencies for retail trading call for Securities Regulatory Commission approval.…
— Wu Blockchain (@WuBlockchain) October 6, 2023
According to Mr Hui, cryptocurrency services companies have made use of stablecoins this kind of as USDT and USDC as most important trading assets for the reason that their worth is developed to be steady when pegged to a different steady asset, this kind of as gold or fiat currency (USD, EUR, British Pound).
However, stablecoin cost stability is risky for the reason that it needs satisfactory approaches of reserve management, and extreme fluctuations or collapses have occurred in the previous (usually LUNA – UST). Therefore, retail trading of stablecoins will not be permitted until eventually Hong Kong officially regulates stablecoins, anticipated by the finish of 2024.
Hong Kong’s Minister of Financial Services and Finance also explained that the JPEX cryptocurrency exchange scandal even more demonstrated the value of laws for this marketplace to be certain higher safety for customers.
As reported by Coinlive, JPEX has been accused by Hong Kong’s Securities and Derivatives Commission (SFC) of working illegally for the reason that it does not have a license to trade virtual assets (VATP). Law enforcement carried out an investigation and acquired far more than two,000 complaints from customers with reported losses of up to $180 million, then arrested a connected KOL.
After the incident, to conquer the consequences and avert long term cryptocurrency-connected hazards, Hong Kong authorities set up a force to supervise cryptocurrency-connected actions and at the exact same time publish a record of cryptocurrency exchanges that have and do not have licenses of work out.
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