HONG KONG, July 23 (Xinhua) -- Chief Executive of the Hong Kong Monetary Authority (HKMA) Eddie Yue said in a statement on Wednesday that it is important to implement the Stablecoins Ordinance in a robust and sustainable manner.
Hong Kong's Stablecoins Ordinance will come into effect on Aug. 1. Yue said that given the merits of stablecoins as an emerging payment instrument and their gradual integration into the mainstream financial system as regulation takes shape, it is necessary to guard against undue speculation caused by market and public opinions.
Judging the market and public excitement over the past month, it seems necessary to further rein in the euphoria, he said.
In regard to guarding against financial risks, as an international financial center, Hong Kong is widely recognized for its prudent regulatory standards. In light of shared international regulatory concerns, more stringent requirements will be imposed in respect of anti-money laundering to minimize the risks of stablecoins being used as a money laundering tool. This is to ensure the orderly and healthy development of Hong Kong's stablecoin market, Yue said.
Yue said that regulation is an art of balancing divergent objectives. More stringent regulatory requirements will inevitably limit the room for stablecoin businesses to scale rapidly in the short term.
However, it is better for regulated stablecoin business, which is still in its infancy, to start with stricter regulations to ensure sound operation, he added.
Yue pointed out that the HKMA also recognizes the importance of ensuring that the regulatory requirements are necessary and reasonable to create room for issuing entities to stand on their feet and thrive.
