While stablecoins catching the pulse of the rapidly growing crypto market globally, Hong Kong announced retail stablecoin trading is still not allowed in the country.
What Happened: Hong Kong’s Secretary for Financial Services and the Treasury Christian Hui said the country has not adopted any regulations for stablecoins such as Tether USDT/USD or USD Coin USDC/USD. Thus, those assets will not be allowed to trade on the exchange.
The Hong Kong Monetary Authority may introduce regulatory guidelines for the stablecoin market by 2024 end, as reported by Coin Telegraph.
Read Now: Hong Kong Regulators Bolster Crypto Investigation Efforts On Heels Of JPEX Probe
The official highlighted that although the majority of cryptocurrency service providers across the globe use stablecoins as a major trading asset due to the stability of the peg to the U.S. dollar/traditional currencies or assets such as gold, the Asian country found it risky as many stablecoins faced major volatility issues and collapse. The reserve management of stablecoins highly affects the price stability of investors’ rights to redeem traditional currencies.
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Until any official regulations are passed for stablecoins, they will not be given the green light to trade.
Why Does It Matter: In late May 2023, Hong Kong announced it would allow retail trading of cryptocurrencies and accept applications from exchanges to offer such services starting June 1. Regulators officially allowed retail investors to trade cryptocurrencies like Bitcoin in early August 2023.
Very soon after the trading was allowed, Hong Kong cryptocurrency trading platform JPEX found itself amidst an investigation in September 2023 from authorities as they received more than 2,000 complaints from JPEX users reporting almost $180 million in losses.
In the most recent development, this week saw the Hong Kong Police Force and the Securities and Futures Commission create a dedicated crypto-focused working group as the latter accuses JPEX of operating in the region without a proper license.
Also Read: Crypto Fraudsters Arrested In Hong Kong, Over A Billion Dollars In Assets Frozen
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