Hong Kong’s Legislative Council has handed the Stablecoin Invoice, paving the way in which for a regulated framework that would place the area as a world chief in digital property and Web3 improvement.
In a Could 21 publish on X, Legislative Council member Johnny Ng Package-Chong stated the invoice handed its third studying, clearing the ultimate hurdle for adoption.
“It’s anticipated that by the tip of this 12 months, main establishments will be capable of apply to the Hong Kong Financial Authority to turn into licensed stablecoin issuers,” Ng stated.
In line with the brand new Hong Kong laws, stablecoins should be backed by fiat forex as underlying property. Ng stated Hong Kong is welcoming “world enterprises and establishments serious about issuing stablecoins to use in Hong Kong,” providing to personally help with introductions and collaboration:
“I’m additionally completely happy to facilitate connections and collaborate with all stakeholders to advance the event of Web3 in Asia and globally, with Hong Kong on the middle.“
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Hong Kong goals to turn into a web3 powerhouse
Ng stated the laws marks step one on the highway towards constructing Web3 infrastructure in Hong Kong. “Probably the most essential step is to develop extra real-world purposes.”
Ng stated stablecoin adoption has the potential to drive innovation in retail funds, cross-border commerce, and peer-to-peer transactions.
He added that he encourages the event and adoption of stablecoins, since “they symbolize a serious monetary innovation.” Concerning enhancing market stability, Ng advised distributing curiosity earnings to stablecoin holders.
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Curiosity for stablecoin holders
In line with Ng, “offering curiosity will strengthen the competitiveness of stablecoins.” This elevated competitiveness, he defined, incentivizes broader participation and expands stablecoin market share, which helps what he views as sustainable development.
Ng’s remarks that yield-bearing stablecoins are extra aggressive observe current information displaying that that is the case. Current analysis signifies that yield-bearing stablecoins have soared to $11 billion in circulation, representing 4.5% of the overall stablecoin market, a steep climb from simply $1.5 billion and a 1% market share initially of 2024.
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