The CCI assessed the HKMA’s proposed stablecoin regulations and suggested moderation and acceptance of innovation.
The Crypto Council for Innovation (CCI) submitted a comment on the proposed stablecoin regulatory regime in Hong Kong on the last day of the comment period. The advocacy group’s five-page letter contained substantial criticism of the proposed reserve and operational requirements and mounted a lively defense of algorithmic stablecoins, which Hong Kong authorities had taken a dim view of.
The Hong Kong Monetary Authority (HKMA) and Financial Services and the Treasury Bureau (FSTB) released a consultation paper on Dec. 27. The proposed regulatory framework foresaw licensing stablecoin issuers that had an office in Hong Kong with senior manager present and reserves “at least equal to the par value.”
“We applaud FSTB and HKMA for taking important first steps in crafting a regulatory regime,” the CCI wrote. Nonetheless, it saw potential problems ahead. Reserve requirements could be an “outsized burden” if they duplicate requirements in other countries, the CCI wrote, and:
