Hong Kong’s financial regulator has stated that the first stablecoin licences will not be issued this year despite the fact its stablecoin legislation has taken effect as of today.
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The Hong Kong Monetary Authority (HKMA) has moved to quell the market’s expectations after the stablecoin bill was passed back in May.
Since then, investors have ploughed money into Hong Kong-based crypto companies.
Fintechs ave also looked to raise cash to expand their businesses in anticipation of Hong Kong’s future status as a global hub for digital assets.
According to Reuters, at least 10 Hong Kong-listed companies raised a total of more than $1.5 billion from share placements in July for investment in reas such as stablecoins, digital assets and blockchain-based payment systems.
And while the HKMA will now accept stablecoin licence applications, approval is unlikely to be granted until 2026 at the earliest. Furthermore, only a “handful” will be granted in the first batch of applicaitons according to HKMA deputy chief executive Darryl Chan.
The HKMA has previously issued statements warning of the risks around the digital assets market and the stablecoin market especially which has attracted a lot of investor speculation around new legislation and licences.
HKMA has been actively flagging risks around the growing frothiness of the market around stablecoins most recently.
The regualtor issued a statement earlier this week calling on marekt participants “to exercise due caution in their public communications, as well as refrain from making statements that could be misinterpreted or create unrealistic expectations”.
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