The central banking institution of Hong Kong, the Hong Kong Monetary Authority (HKMA), reportedly started its work on its stablecoin regulatory framework introduction, via sharing a questionnaire regarding stablecoin with the public. 

Specifically, the HKMA reportedly rolled out a questionnaire consisting of eight questions, aiming to gather policy-associated opinions and recommendations from the general audience, focusing on crypto-assets and stablecoins.

HKMA’s “Discussion Paper on Crypto-assets and Stablecoins” reportedly emphasizes the significant surge in the development of the stablecoin market, market capitalization-wise, since 2020, and the concurrent regulatory suggestions proposed by global regulatory bodies,  nominally America’s Financial Action Task Force (FATF), the Financial Stability Board (FSB) and The Basel Committee on Banking Supervision (BCBS).

Per the HKMA, the existing size and trading activity of crypto-assets may reportedly hold no impending risks to the stability of the international financial network, systematically speaking. 

“The growing exposure of institutional investors to such assets as an alternative to or to complement traditional asset classes for trading, lending and borrowing […] indicate growing interconnectedness with the mainstream financial system.” The discussion paper issued warnings, nonetheless. 

HKMA’s paper reportedly revealed that the market capitalization is at approximately $150 billion in December last year, “representing about 5% of the overall crypto-asset market.”

The above-mentioned list of eight questions released by the regulators reportedly includes five possible regulatory outcomes – no action, opt-in regime, risk-based regime, catch-all regime, and blanket ban. 

The expected timeline for the roll-out of the new regime is reported “no later than 2023/24”, per the HKMA, and sets 31st March this year as the deadline for stakeholders to submit their responses.