The Financial Secretary of Hong Kong, Paul Chan Mo-po, has spoken out on stablecoins!
On June 15, Paul Chan Mo-po stated in a blog post titled 'Accelerate Forward, Set Sail for Steady Navigation' that after the Stablecoin Ordinance comes into effect, the Hong Kong Monetary Authority will process the received license applications as soon as possible, so that eligible applicants can carry out their business.
He also revealed that Hong Kong will soon issue a second policy declaration on the development of digital assets, outlining the next policy vision and direction. A series of specific measures include better combining the advantages of traditional financial services with technological innovation in the digital asset field, enhancing the security and flexibility of digital assets in real economic activities, and encouraging local and international companies to explore innovations and applications of digital asset technology.
In order to provide mooers with further reference, here is a list of companies related to the concept of stablecoins.
Issuers must provide specific business rationale.
The Stablecoin Ordinance was passed by the Hong Kong Legislative Council on May 21 and was officially published on May 30, establishing a licensing system for fiat stablecoin issuers, which will take effect on August 1. This has become a focus of high attention in the market recently. 'We have noticed that many market participants are very interested in this,' said Paul Chan Mo-po.
Recently, ANT GROUP CO., LTD. announced that it has initiated an application for a Hong Kong stablecoin license, and has already engaged in multiple rounds of communication with regulators. In addition, ANT GROUP CO., LTD.'s ANT International is also applying for a stablecoin license in Singapore. JD.com’s JD Coin Chain Technology has been selected as one of the first participants in the 'stablecoin sandbox' announced by the Hong Kong Monetary Authority last year. Liu Peng, CEO of JD Coin Chain Technology, recently stated that they are actively engaging in close communication and cooperation with the Hong Kong Monetary Authority and other regional regulators to promote JD's stablecoin business in compliance globally. Besides fintech giants, there are also reports that banks are eager to try.
Paul Chan Mo-po stated that after the ordinance comes into effect, the Hong Kong Monetary Authority will promptly process license applications received to enable eligible applicants to carry out their business, bringing new opportunities to the real economy and financial services in Hong Kong.
It is reported that stablecoin issuers must not only meet a series of risk management, anti-money laundering, and other requirements but also provide specific business rationale, such as application scenarios, explaining how their stablecoin business can practically address pain points in economic activities, closely integrating financial innovation with real economic services to promote the sustainable development of the industry.
According to estimates, the total market value of global stablecoins is approximately 240 billion USD, while last year, the global trading volume of stablecoins exceeded 20 trillion USD. Paul Chan Mo-po said, "With the vigorous development of the digital assets market, the demand for stablecoins is expected to further increase."
Stablecoins are digital assets that are pegged to a fiat currency or linked to specific assets, ensuring price stability. Among them, fiat-backed stablecoins, due to the security and efficiency of blockchain technology and the stability of fiat currencies, will become potential tools that integrate the financial system and the real economy to reduce costs and enhance efficiency. Stablecoins can serve as a means of transaction without the traditional payment time and geographical restrictions, and due to their programmable nature, they can explore diverse innovative solutions, automating and intelligentizing financial service processes.
"Hong Kong is cautiously advancing the development of stablecoins, providing a new paradigm for the global stablecoin market and offering experience and references for national financial development." Paul Chan Mo-po said, for example, Hong Kong has adopted a more open model, allowing licensed issuers to choose different fiat currency types as the pegged fiat currency for issuing stablecoins, which is conducive to attracting more institutions from around the world to issue stablecoins in Hong Kong according to actual application scenarios, greatly enhancing the liquidity of related activities and the competitiveness of the Hong Kong market.
The traditional business such as the Hong Kong stock market is steadily growing.
Paul Chan Mo-po also stated in his blog that the external environment has remained unclear this year, but the depth and breadth of the Hong Kong stock market have noticeably improved.
Following the rising trend from last year, the Hang Seng Index has accumulated an increase of over 3,800 points this year, with a growth rate of about 20%, performing among the best among major global indices. At the same time, as of May this year, the daily average trading amount of the stock market has increased by approximately 1.2 times year-on-year, reaching 242 billion yuan; the total amount of new stock financing this year has also approached 79 billion yuan, ranking among the top globally, with stock market refinancing exceeding 150 billion yuan.
Many cornerstone investors in large new stock offerings come from Europe, America, the Middle East, and other regions in Asia. The trend of increased funds from these regions being allocated to Hong Kong stocks is becoming more evident." Paul Chan Mo-po said, "In addition, bank deposits continue to increase, and interbank rates remain low. The flow of funds confirms that international investors' confidence in the Hong Kong financial market is further strengthening."
Hong Kong's asset and wealth management business is also steadily growing. As of the end of March this year, the number of registered funds in Hong Kong reached 976, with a net inflow of funds exceeding 44 billion USD year-on-year, an increase of 285%.
Paul Chan Mo-po said, "I believe that within two to three years, Hong Kong will become the largest cross-border Asset Management center in the world. As the financial market continues to thrive, the number of people entering the financial Industry is also on the rise. This year, according to the Securities and Futures Ordinance, the number of individuals and Institutions applying for licenses has seen a double-digit growth compared to the same period last year."
In addition to traditional areas such as the stock market and Asset Management, Hong Kong has also made significant progress in digital finance, green finance, and the offshore RMB market. According to Paul Chan Mo-po, since Hong Kong announced its first policy declaration on the development of the digital asset market at the end of 2022, the related market has clearly accelerated its development in Hong Kong, attracting a number of relevant companies to settle and expand in Hong Kong. So far, 10 virtual asset trading platforms have been licensed, and the Hong Kong Securities and Futures Commission is processing another 8 license applications. "We are also advancing regulatory arrangements for custody and over-the-counter transactions."
The development of digital assets has also driven related Business in Financial Institutions. It was reported that last year, the total trading volume of digital assets and related products in Hong Kong banks reached 17.2 billion HKD, and by the end of last year, the total amount of digital assets held in custody by banks reached 5.1 billion HKD.
Get more market analysis.Futubull AI is now online!Providing precise answers, comprehensive insights, and grasping key opportunities!
Editor/rice
