The Hong Kong Monetary Authority is reportedly planning to expand the purview of its supervision of virtual assets to include entities that issue stablecoins. The Hong Kong regulator said it also wants to create a framework that governs banks’ provision of virtual asset custody services.

Hong Kong’s ‘Very Clear’ Rules

The Hong Kong Monetary Authority (HKMA) is working on expanding the scope of its supervision of virtual assets to include stablecoin issuing entities, Chen Haolian, Deputy Secretary for Financial Services and the Treasury, has said. Speaking at the recently held Hong Kong Fintech Week, Haolian also revealed that HKMA and the region’s treasury will soon ask for the public and the banking industry’s input on this matter.

According to a local report, the Hong Kong regulator wants to create a framework to govern banks’ provision of virtual asset custody services. Such a framework will not only ensure that customer assets are protected but it will also supposedly cement Hong Kong’s emerging reputation as a region with “very clear” rules.

In his speech at the weeklong event, the deputy secretary claimed that many European companies are interested in establishing a presence in Hong Kong. Such a presence will be used as a launchpad for the respective companies’ entry into China’s mainland market.

Meanwhile, when discussing the likely impact of Web3 technology on the broader economy, Haolian argued that the technology can be the basis for solving problems in finance, education and business operations. The technology could also help improve efficiency and reduce costs, and according to Haolian, “we should seize and embrace the benefits and opportunities it brings.”

Concerning blockchain, the deputy director revealed that Hong Kong has been promoting the use of this technology in the insurance industry and trade finance for more than four years.

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