HSBC and the world’s largest financial institution by complete property, the Industrial and Industrial Financial institution of China (ICBC), reportedly plan to use for stablecoin licenses in Hong Kong because the area’s new regulatory regime takes impact.
According to a Monday report within the Hong Kong Financial Journal, each HSBC and ICBC signaled their intention to use for a stablecoin license with the Hong Kong Financial Authority (HKMA). Neither financial institution responded to Cointelegraph’s request for remark by publication.
The HKMA beforehand stated it’s prone to solely difficulty just a few stablecoin licenses at first. In line with the report, Standard Chartered and ICBC are prone to obtain their licenses within the first spherical, giving them a possible first-mover benefit.
The Hong Kong Financial Journal reported that on the finish of August, 77 establishments had expressed curiosity in making use of for a stablecoin license. Some candidates reportedly described the necessities as stricter than anticipated.
Associated: China weighs yuan-backed stablecoins in major policy shift: Reuters
Stringent necessities for Hong Kong stablecoin issuers
On Aug. 1, Hong Kong’s new stablecoin regulatory framework got here into impact with a six-month transition period. The brand new Stablecoin Ordinance criminalizes the offering or promotion of unlicensed fiat-referenced stablecoins to retail buyers and units a excessive bar of entry for issuers.
When the brand new guidelines took impact, stablecoin companies operating in Hong Kong reported double-digit losses. Some corporations fell as a lot as 20% in a single day, however native market specialists described this as a wholesome correction, as the foundations have been discovered to be stricter than anticipated.
After setting the bottom guidelines for stablecoin issuance, Hong Kong regulators moved their consideration to crypto custody. In mid-August, the Hong Kong Securities and Futures Fee (SFC) issued instantly efficient steering on cryptocurrency custody requirements, introducing sweeping security requirements and a ban on good contracts in chilly pockets implementations.
Associated: China cracks down on stablecoin promotions, research and seminars
Hong Kong’s new stablecoin regime
The brand new stablecoin licensing regime has attracted vital consideration since its rollout. In mid-August, the SFC warned that the introduction of the new local stablecoin regulatory framework had increased the risk of fraud.
Its assertion on the matter recommended that the heightened hypothesis surrounding stablecoin information elevated the danger of fraud. An official urged buyers to train warning and keep away from making irrational funding choices pushed by market hype or worth momentum.
Journal: Hong Kong hoses down stablecoin frenzy, Pokémon on Solana: Asia Express