HKMA will only issue a few stablecoin licenses despite 77 applicants

The Hong Kong Financial Authority (HKMA) mentioned firstly of Monday that it’ll solely approve a couple of licenses in his Stablecoin, though 77 establishments have already proven curiosity. That quantity arrived on the finish of August.

It’s a full rush; Banks, e-commerce platforms, expertise firms, Web3 startups, cost firms and asset managers are all on the record, in response to reporting of native media.

One of many largest names that chases this license is the commercial and industrial financial institution of China (ICBC), the most important financial institution on the earth by belongings. It applies by means of his Hong Kong -arm, ICBC (Asia).

That makes it the second Chinese language financial institution of the highest to step in, after Financial institution of China (Hong Kong). HSBC, the most important financial institution in Hong Kong, has not but submitted, however it’s circling.

Legislators say that guidelines shall be troublesome, and just one license can are available in early 2025

Legislers help HKMA’s strict strategy. In keeping with NG KIT-Chong, a member of the legislative Council of Hong Kong, the brand new guidelines are tight by design.

“The variety of permits to be granted shall be very small,” he mentioned, including that “probably one license” might even come early subsequent yr. And that is not all. The legislators additionally put together new laws for offline OTC -Crypto transactions, which will also be rolled out in 2025.

HKMA has informed the candidates to submit full purposes on the finish of September if they’re severe. However it warned everybody: submitting an curiosity or perhaps a full request doesn’t imply approval. They do not spend trophies for participation.

The general public was additionally informed to not belief ads or promotions which are linked to Stablecoins with no allow, as a result of they aren’t legally acknowledged.

Cora Ang, authorized head at Amina Group, mentioned: “The regime will filter those that usually are not in accordance with the strict laws, produce possible use instances and show monetary stability.” Her level? If you’re not prepared, you’re gone. She added that after disasters akin to FTX, supervisors take zero alternatives. “They do not need a notion that their regime shouldn’t be sturdy sufficient – it is a repute danger,” she mentioned.

In 2022, FTX collapsed into a multitude of fraud and cash laundering. That mess continues to be recent within the heads of regulators. HKMA doesn’t wish to be a part of a repetition.

A report from S&P International Scores mentioned that the primary batch of Stablecoin -Emitents will in all probability be giant expertise firms and huge banks. Small banks? Not so completely satisfied. In keeping with S&P, they are often crushed with capital prices as much as 1,250% in the event that they attempt to maintain stablecoins on their steadiness sheets. That truly makes it too costly to even attempt it.

NG KIT-Chong additionally mentioned that knowledge belongings, together with Bitcoin, at the moment are being added to nationwide and enterprise reserves in varied international locations. “It has change into an inevitable development,” he mentioned. In different phrases, Stablecoins are just one piece of an enormous cake.