Hong Kong is opening up to stablecoins on these terms

Hong Kong is one of the most open cities for the cryptocurrency industry.
More recently, it has embraced a policy of regulation rather than prohibition.
It also announced a new initiative related to stable cryptocurrencies, which will be regulated under certain conditions.

Hong Kong announces its conditions for the approval and adoption of digital stablecoins linked to fiat currencies

Hong Kong has once again moved forward with legislation for the digital asset industry.
The Hong Kong Monetary and Treasury Authority has recommended measures to regulate companies offering stablecoins.
Industry players will have until February 29, 2024, to express their opinions on the proposed rules.

The Hong Kong Monetary Authority intends to force companies offering stablecoins based on fiat currencies to obtain a license.
To obtain a license, they must prove that they hold at least reserves equal to the amount of stablecoins issued.
In other words, the monetary authority wants to ensure that stablecoins are linked at all times, to avoid a sudden loss of their correlation with the currency they represent.

On the other hand, stable digital currencies that are algorithmic are specifically excluded from these licenses.
In other words, projects like Tera (UST), which rely on algorithms to maintain the price of the asset, will not be allowed.
This is likely due to the fall of the latter, which marked the beginning of the bear market the ecosystem experienced.

Among other requirements proposed in this recommendation, the Monetary Authority intends to impose a residency requirement on crypto companies that issue digital stablecoins.
In other words, they should have an office in Hong Kong, where there will be a manager and management team as well as a real team of employees.

Thus, Hong Kong continues to advance an open but regulated approach to the sector.
For your information, a few days ago, the independent territory confirmed that it is ready to accept spot Bitcoin ETFs, the same ones that are causing a lot of controversy in the United States.

Additionally, Hong Kong has doubled down on measures in recent months, forcing banks to accept crypto companies as clients. This new advisory is thus another sign of adoption for the sector.

If the proposed rules are adopted, Hong Kong will become one of the first regions in the world to regulate stablecoins.
It is also clear that the boycott aims to make it easier for cryptocurrency companies to operate while ensuring the protection of consumers.

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