The Hong Kong Monetary Authority (HKMA) is pushing for measures to regulate stablecoins to address the risks they pose to financial stability as highlighted by the crypto sector’s turmoil last year. HKMA will start by regulating stablecoins that reference fiat currencies, including the Hong Kong dollar, as their use in payments and ties with the traditional financial systems mean they pose a bigger risk to monetary stability. The HKMA said a total of 58 submissions were received, and respondents generally indicated their support for regulating stablecoins since it launched a consultation in January 2022. Activities such as the issuance of stablecoins, provision of wallet services, and reserve management will be regulated. Entities that conduct such regulated activities in Hong Kong or actively market to the Hong Kong public will need to apply for a licence from the HKMA.