Source: Cointelegraph
Original: “Hong Kong Passes Stablecoin Bill, Plans to Open Licensing by Year-End”
The Legislative Council of Hong Kong has officially passed the stablecoin bill, paving the way for the establishment of a regulatory framework, which is expected to position Hong Kong as a leader in the global digital asset and Web3 development space.
In a message posted on May 21 on the X social platform, Hong Kong Legislative Council member Wu Jiezhuang confirmed that the bill has successfully passed its third reading, thereby removing the final obstacle to its implementation.
"It is expected that by the end of 2023, major financial institutions will be able to submit applications to the Hong Kong Monetary Authority for stablecoin issuer licenses," Wu stated in his announcement.
According to the newly enacted legislation in Hong Kong, stablecoins must be backed by fiat currency as the underlying asset. Wu mentioned that Hong Kong welcomes "global companies and institutions interested in applying for stablecoin issuance in Hong Kong" and is willing to personally assist in building connections and cooperation:
"I am also very willing to facilitate connections and collaboration with all stakeholders to jointly promote the development of Web3 in Asia and globally, and to establish Hong Kong as a core center."
Wu stated that this legislation marks the first step in building Web3 infrastructure in Hong Kong. "The most critical aspect is to develop more practical application scenarios."
Wu pointed out that the application of stablecoins has the potential to drive innovation in retail payments, cross-border trade, and peer-to-peer transactions.
He further emphasized that he encourages the development and application of stablecoins because "they represent a significant financial innovation." Regarding enhancing market stability, Wu suggested allocating interest earnings to stablecoin holders.
According to Wu, "Providing interest will significantly enhance the market competitiveness of stablecoins." He explained that this enhanced competitive advantage will incentivize broader market participation, expand the market share of stablecoins, and support what he believes to be a sustainable development model.
Wu's view on the competitiveness of yield-bearing stablecoins is supported by the latest data. Research shows that the circulation of yield-bearing stablecoins has surged to $11 billion, accounting for 4.5% of the entire stablecoin market, compared to $1.5 billion and 1% market share at the beginning of 2024, achieving significant growth.
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