The United States is currently working on regulations for the stablecoin market and will present three drafts of the legislation by the first week of June.
The Hong Kong Money Related Power (HKMA) has finished a public discussion on stablecoin guidelines and expects to present clear administrative rules for the stablecoin market toward the end of 2024.
Joseph Chan Ho-Lim, Under Secretary for Monetary Administrations and the Depository of the Public Authority of Hong Kong, expressed that, throughout recent years, Hong Kong has emerged as a developing objective for fintech firms. In addition, Chan stated that authorities are actively promoting the Web3 ecosystem with an emphasis on investor security.
The Hong Kong Monetary Authority (HKMA) shared a list of eight questions regarding policy-related recommendations in January 2022, citing five potential regulatory outcomes: 1) No action 2) a system of opt-in; 3) a plan based on risk; 4) an umbrella policy; 5) a complete ban. The Hong Kong Monetary Authority (HKMA) demanded that all stablecoin issuers always back up their values with underlying reserve assets when the outcome of regulatory discussions outright prohibited the incorporation of algorithmic stablecoins into its stablecoin framework in January 2023.
After the public consultation phase is over, the HKMA will concentrate on issuance, governance, and stability.
At a time when the majority of its Western counterparts are still taking a cautious approach to the nascent sector, Hong Kong has taken the lead in the crypto regulatory space in 2023. In addition to allowing retail traders to trade cryptocurrency, the HKMA has instituted a licensing system for cryptocurrency exchanges that requires them to abide by stringent anti-money laundering regulations.
Related: An executive asserts that stablecoins are the answer to crypto's banking issue.
In addition to Hong Kong, the House Financial Services Committee of the United States is attempting to establish regulations for the stablecoin market. In 2023, the committee has proposed three draft bills regarding stablecoins. The most recent of these bills calls for some capacity for state authorities to intervene and key powers for the Federal Reserve.
The methodology of neighborhood controllers in the two nations couldn't be more unique. From one viewpoint, Hong Kong controllers are effectively trying to make the country a crypto center, though, then again, the activities of U.S. controllers could compel many laid-out organizations to move out of the nation, including stablecoin guarantors. Several stablecoin issuers have been accused of breaking securities laws by the U.S. Securities and Exchange Commission, which has even taken action against Paxos Trust, the USD issuer.
(PRASHANT JHA, CoinTelegraph, 2023)