After the important steps taken by Singapore, the Monetary Authority (HKNA) has published an important draft on the new regulation rules in Hong Kong, which has taken on a much more positive atmosphere about cryptocurrencies in order not to fall behind.
No algorithmic stablecoins allowed
In the new series of laws, the stablecoin issuer company is required to obtain a license. It is stated that while every stablecoin issued must have a support asset behind it, algorithmic stablecoins will not be allowed. The following statements were used in the statement made on the subject:
“Stable coins that derive their value from arbitrage or an algorithm will not be accepted. Holders of stablecoins should be able to convert their stablecoins into referenced fiat money within a reasonable time frame.
Therefore, the issue of supporting all coins, which has been the subject of discussion in the fixed coin field for years, is desired to be resolved. It is aimed to prevent such collapses by banning algorithmic stable coins, which are more talked about especially with Terra LUNA events.
“The institution does the job whichever license it has”
It is also stated in the set of rules that a company providing services in one area should not “operate in another area in a way that deviates from its main operations”. An example of this is that a firm that is a wallet provider cannot simultaneously provide credit. While no specific date was given for the implementation period of the regulations, the 2023-24 period was determined as the target.
Binance, Mastercard, Visa, Alibaba expressed opinion
Among the 58 companies that participated in this study by the Hong Kong Monetary Authority, there were giants of both finance and crypto world. Among the companies that expressed their opinions to the institution, Alibaba, which is seen as the largest internet company in China, as well as Binance stock exchange, Visa and Mastercard, and South Korean Animoca Brands, known for their Web3-metaverse investments, were also included.
