Hong Kong’s stablecoin licensing regime, set to start on August 1, is drawing important curiosity from the area’s monetary and tech heavyweights, with native media in China reporting that over 40 functions have been obtained.
However expectations are being tempered by the fact that the Hong Kong Financial Authority (HKMA) is prone to approve solely a single-digit variety of licenses, in keeping with stories, making this one of the vital aggressive regulatory races within the metropolis’s digital finance historical past.
Regardless of the frenzy of curiosity, solely three companies have been admitted to the HKMA’s stablecoin sandbox thus far, together with a three way partnership between Commonplace Chartered and Animoca Manufacturers.
In line with an HKMA reality sheet, the sandbox was created to permit firms with a real and well-developed plan for issuing fiat-referenced stablecoins to have interaction with regulators, refine compliance fashions, and provide suggestions on proposed guidelines.
Admission shouldn’t be an endorsement or assure of licensing and sandbox contributors will nonetheless want to use formally as soon as the complete regime is reside. Nevertheless, the restricted variety of companies accepted into this testing part presents an early have a look at how slim the approval funnel could also be.
Many of the companies getting ready to use are amongst China’s largest banks, cost processors, and web firms, in keeping with stories.
Commonplace Chartered’s three way partnership, JD.com’s blockchain division, and Ant Group’s digital finance models are all anticipated to be contenders, with Commonplace Chartered and JD already sandbox contributors.
The HKMA’s cautious strategy appears to be in step with how the Securities and Futures Fee (SFC) has dealt with digital asset platforms, granting simply 11 licenses thus far.
Throughout the SFC licensing course of for digital asset platforms, a variety of high-profile contenders withdrew their functions, and stories on the time indicated that the regulator found “unsatisfactory practices” at some exchanges.
Learn extra: Hong Kong Units Out Plan to Regulate Crypto, Encourage Tokenization
