It will "enhance Hong Kong's existing regulatory framework on virtual-asset (VA) activities, thereby fostering financial stability and encourging financial innovation," the central banking body said. It added that it would conduct further consultations on the detailed regulatory framework.
The Hong Kong government said in a statement that the stablecoins policy is expected to come into effect this year, with "sufficient time" allowed for the industry to understand the requirements.
In 2023, Hong Kong introduced its virtual asset licensing regime, which requires cryptocurrency firms with an official presence in the city to apply for licenses and meet specific standards and requirements to offer digital assets to retail investors in the city. However, the existing policy did not include stablecoins in its purview.