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 local media in China reporting that over 40 functions have been obtained.
However expectations are being tempered by the truth that the Hong Kong Financial Authority (HKMA) is prone to approve solely a single-digit variety of licenses, in line with reviews, making this one of the vital aggressive regulatory races within the metropolis’s digital finance historical past.
Regardless of the push of curiosity, only three firms have been admitted to the HKMA’s stablecoin sandbox so far, together with a three way partnership between Normal Chartered and Animoca Manufacturers.
Based on 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 just isn’t an endorsement or assure of licensing and sandbox contributors will nonetheless want to use formally as soon as the complete regime is dwell. Nevertheless, the restricted variety of companies accepted into this testing section gives an early take a look at how slim the approval funnel could also be.
A lot of the companies making ready to use are amongst China’s largest banks, fee processors, and web firms, in line with reviews.
Normal Chartered’s three way partnership, JD.com’s blockchain division, and Ant Group’s digital finance items are all anticipated to be contenders, with Normal Chartered and JD already sandbox contributors.
The HKMA’s cautious method appears to be in line 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, quite a few high-profile contenders withdrew their applications, and reports at the time indicated that the regulator found “unsatisfactory practices” at some exchanges.
Learn extra: Hong Kong Sets Out Plan to Regulate Crypto, Encourage Tokenization