Source: Shanghai Securities News
Author: Huang Bingyu
On July 23, Eddie Yue, the Chief Executive of the Hong Kong Monetary Authority (HKMA), wrote about stablecoins again. Yue stated that over the past month, the market and social discussions on stablecoins still need to be strengthened, and discussed how to implement the Stablecoin Ordinance according to prudent and sustainable principles.
Yue pointed out that it is necessary to prevent excessive market and public opinion hype about stablecoins, and highlighted several recent phenomena of note. First, over-conceptualization. Yue revealed that from Hong Kong's experience, dozens of institutions have proactively contacted the HKMA team, with some explicitly expressing interest in applying for a stablecoin license, while others are in preliminary exploratory stages. However, many are stuck at the conceptual stage, such as proposing to enhance cross-border payment efficiency, support Web 3.0 development, and improve foreign exchange market efficiency, but lack actual application scenarios and viable specific plans. Moreover, they lack the awareness and ability to manage various financial risks. Yue suggested that for such institutions, a more practical approach might be to collaborate with other stablecoin issuers and provide application scenarios, rather than pursuing the role of an issuer.
Another noteworthy trend is market bubbling. Yue noted that with the recent hype around stablecoins, the market has shown excessive excitement. Some listed companies, regardless of their core business's relevance to stablecoins or digital assets, see their stock prices rise and trading volumes increase simply by claiming interest in exploring stablecoin business, thereby significantly enhancing their visibility.
Yue reiterated that the HKMA had previously made it clear that in the initial stage, only a few stablecoin licenses would be issued, and advised investors to remain calm and think independently when consuming market "positive" news.
Yue stated that after the Stablecoin Ordinance was passed, the HKMA immediately sought market opinions on two guidelines for regulation and anti-money laundering. They are currently adjusting the guidelines based on feedback, aiming to publish them by the end of July. The final version is expected to have minimal changes from the consultation draft, and given international regulatory concerns, more stringent anti-money laundering requirements will be established to minimize the risk of stablecoins being used for money laundering, ensuring an orderly and healthy development of Hong Kong's stablecoin market.
Additionally, Yue mentioned that a summary of the "Stablecoin Issuer Licensing System" will be published next week, detailing the HKMA's arrangements for accepting and processing license applications.
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