Hong Kong aims to regulate stablecoins like banks

The Hong Kong Monetary Authority (HKMA) has proposed a bank-like regulation on fiat currency-backed stablecoins. Hong Kong’s de facto central bank is now seeking public feedback on the proposal aimed to counter the growing risks such fiat currency-backed digital tokens pose to the city’s financial system. The consultation is open until the end of March. The HKMA plans to introduce the new regime by 2024. In proposing to regulate the USD150bn global stablecoin market, the HKMA has acknowledged that stablecoins could become a widely accepted means of payment. The proposal comes just three months after the HKMA announced plans to explore its own digital currency, the e-HKD, for retail use. The HKMA was also seeking views on whether all stablecoin issuers should be regulated under the city’s banking ordinance akin to banks.