Hong Kong plans to develop cryptocurrency asset management plan by July 2022

On January 12, 2022, Hong Kong Financial Institutions (HKMA) announced a round of talks on cryptocurrencies and fixed coins.An interactive form of crypto assets and fixed currency), companies and the public can submit comments on the governance standards until March 31, 2022.

This information presents MAS' vision for standards governing crypto assets, particularly fixed funds used for payments. The model takes into account the international consensus, regional economic policies and regulations and other important regions, as well as the status of the stablecoin used for payment. HKMA is also focusing on some of the question and answer issues in the data to facilitate dialogue with stakeholders.

David Yu, Managing Director, Hong Kong Monetary AuthorityIt was also published under the title"Crypto Actifs And Stablecoins"Sentence, here is the full text of the article.

The global economic environment is developing rapidly, and the development of technology is also in progress. HKMA promotes financial innovation and adherence to changing circumstances. For example, HKMA commissioned research on Distributed Ledger Technology (DLT) in 2016 and published a free article. In 2019, HKMA and the Central Bank of Thailand announced the “Inthanon-LionRock Project” (later renamed the “Multi-Bank Digital Currency Cross-Border Network Project” (mCBDC Bridge Project)) to learn more about cross-border applications . . Wholesale-level central bank digital currency payment app. The project, with strong support from the Hong Kong Center of the BIS Innovation Hub, will expand in February 2021 to include the Central Bank of the United Arab Emirates and the People's Bank of China Digital Currency Research Institute. Last year, HKMA announced its "Fintech 2025" strategy to support the development of fintech in Hong Kong.

In the process, HKMA welcomes the benefits of financial transformation while understanding the need to monitor and address risks that may arise from improved risk. Among them, we are particularly concerned about the significant improvement of crypto assets in recent years and the integration with the financial system. In this regard, HKMA has adopted risk-based and “same risk, same care” risk to supervise relevant organizations and activities in line with international standards. . Expectations include financial and financial security, consumer and investor protection, and may lead to fraud and financial fraud. Below we provide more details on the HKMA theory.

Crypto Assets grew faster

There is no definition of a crypto asset. The model, nature and use of the asset may vary. These tools are sometimes called virtual assets. Since some commodities do not have a reasonable price, some wonder whether the commodities will qualify as assets. These products cover a wide range of resources, including investments in tokens, securities, electronic devices, and non-fungible tokens.

In recent years, we have witnessed a further increase in the market capitalization of crypto assets (around $2.2 trillion). At the same time, companies and investors are increasingly turning to these assets. Indeed, it reflects the growing importance of the integration of crypto assets and financial resources. In Hong Kong, the government announced that in addition to amendments to the Anti-Money Laundering and Anti-Money Laundering Act, it will create licenses that will allow virtual service providers to mine their industry's cryptocurrency.

Regarding international standards, HKMA focuses on three factors to address the impact of current crypto assets: stable coins that can be used for payments, protection against interference interacting with crypto assets, and integration of activity between underwriting companies and crypto assets. available. , fulfilling HKMA's responsibility to maintain the security of Hong Kong's finances and economy.

stablecoins

Stablecoins are a type of crypto asset that has become very popular in the market in recent years. Unlike most other non-cryptographic assets, securities are usually pegged or sent to one or more assets, such as securities or fiat currency. . Support mechanisms for individual stability coins are not transparent due to the lack of control or disclosure rules for stable operation.

Stablecoins, especially stablecoins used for payments (such as coins used to pay for goods, services, or other financial transactions) in a discussion of governance by international organizations and structural design bodies such than the Financial Council, are of particular interest. . According to the situation and use of these stablecoins for payments, they seem to have a wide and frequent connection with major financial systems as well as modern business, financial and economic conditions. Therefore, fixed coins used for payment purposes can pose an immediate risk to the financial system. For example, if consumer and investor confidence in these assets is destroyed by post-transaction issues, the performance of our payments and payment processor will be severely affected.

For the above reasons, it is important to ensure the safety and quality of planning and activities associated with a stable budget for payments. We have seen in the market that stablecoins and wallets used for payments work similarly to the product of storage costs. HKMA is examining the need to revise existing regulatory procedures, such as payment rules and good credit regulations, to ensure that stablecoins are used for the payment of money in Hong Kong on the principle of "same risk, same right". Maintain proper.

As part of the above activities, today we announced the Cryptocurrencies and Securities Discussion, which sets out the vision for the regulatory framework for the use of securities for payments, and will enable payments at the advance or before March 31, 2022. accepted. Stakeholders. Our aim is to introduce a new administration by 2023/24.

Business Protection

As mentioned above, some crypto assets may not have the same value and their prices may vary widely. These quality products also raise questions about whether these products are suitable for the retailer and how the sales process should be regulated. In this regard, I think it is necessary to open up customer training and strengthen product launches. HKMA and the Securities and Futures Commission are currently working together to develop trust protection measures for accredited institutions that provide brokerage services related to crypto-assets.

Market link between crypto assets and accredited institutions

Accreditation has further increased in the industry related to crypto assets, and HKMA is working on management priorities in this regard. Depending on the type of connection, the design and the nature of the cryptographic equipment, there may be consumer protection, credit risk, market risk, risk of labor fraud, there is a risk of financial fraud (fraud, fraud financial and financial), and a direct impact of AI on assets, even if it is monitored according to international standards approved by the Basel Banking Supervisory Board. The Financial Services Commission has also revised its proposal to combat money laundering and financial risks for virtual assets, including fixed coins. Before establishing business relationships with crypto-asset providers, accredited institutions must strictly assess their various risks and develop risk-appropriate benchmarking measures. HKMA will soon issue a letter to the accredited organization to provide more detailed information on the issues mentioned above.

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HKMA is committed to advancing the balance between safe and sound financial management in Hong Kong and promoting economic development. The discussion on crypto-assets and securities published today is an important opportunity for MAS to communicate with stakeholders on relevant issues. We will monitor the situation closely, remain open and stay informed of changes in the development of the content of the policy. We also participate in relevant international conferences. As an area of ​​the Financial Security Commission, we expect by July 2022 to develop a plan to introduce new rules or modify existing ones, based on those approved by the Board of Directors. Ultimately, we will continue to maintain communication and collaboration with other governing bodies to support international and regional partnerships.