Standard Chartered Bank Hong Kong, Animoca Brands, and HKT are partnering to produce a Hong Kong dollar-backed stablecoin.
Summary
- Industry leaders are working with regulators on stablecoin regulation on both sides of the Pacific.
- Tether is engaging with politicians on stablecoin laws in the US, showing a desire to comply with regulatory monitoring while preserving its market dominance.
- Standard Chartered, Animoca Brands, and Hong Kong Telecommunications (HKT) want to establish a Hong Kong dollar-backed stablecoin, seeking regulatory permission under the city’s growing digital asset framework.
Standard Chartered Bank Hong Kong, Animoca Brands, and HKT have partnered to establish a Hong Kong dollar-backed stablecoin. This new joint company aims to transform digital transactions in the area and beyond by combining the trio’s experience in traditional banking, blockchain technology, and mobile payment systems.
The firm will request an HKMA license to comply with the city’s expanding stablecoin regulatory framework. This initiative is part of Hong Kong’s ongoing effort to become a worldwide leader in digital asset innovation, competing with Singapore in digital banking and cryptocurrencies.
Hong Kong has a unique monetary system where three banks—HSBC, Bank of China (Hong Kong), and Standard Chartered—issue the Hong Kong dollar (HKD) under HKMA regulation.
Standard Chartered’s engagement in this stablecoin program highlights its long-time influence on Hong Kong’s monetary system. The British multinational has participated in HKMA’s tokenized money trial programs and other stablecoin efforts.
Three participants offer different skills to the project:
- Standard Chartered Bank Hong Kong: Hong Kong’s fiat currency issuer and a reputable financial institution with a strong grasp of traditional banking rules and worldwide financial markets.
- Animoca Brands: A worldwide blockchain and venture capital organization that invests in metaverse ventures, NFTs, and Web3 apps.
- Hong Kong Telecommunications (HKT): A prominent mobile payment and telecommunications provider that helped regional digital financial services and payment infrastructures grow.
The joint venture wants to use stablecoin technology for domestic and cross-border payments, integrating blockchain based finance into everyday transactions, remittances, and digital commerce with this formidable combination.
Hong Kong is currently legislating stablecoin regulation. Stablecoin issuers must get a HKMA license and meet reserve, audit, and price stability standards under the proposed Stablecoin Bill, which entered the Legislative Council on Dec. 6 and had its first reading on Dec. 18.
The measure would establish a strict licensing structure similar to the Securities and Futures Commission’s crypto exchange licensing framework. Investor safety, financial stability, and Hong Kong stablecoin growth are the goals of this move.
Since July 2024, the three companies that are responsible for the new stablecoin initiative have been active participants in Hong Kong’s stablecoin issuer sandbox. This regulatory testing environment enables financial institutions and technology companies to develop and refine their stablecoin models before full market deployment.
Digital Asset Strategy and Competitive Edge in Hong Kong
Hong Kong’s dollar-backed stablecoin launch supports the city’s goal of becoming a prominent digital asset center since the government’s 2023 pro-crypto regulation change.
Hong Kong has made tremendous progress toward mainstreaming digital assets, including:
- The government was among the first in Asia to allow the trading of Bitcoin (BTC) and Ethereum (ETH) ETFs.
- Regulatory licensing for cryptocurrency exchanges The aim is to enhance the openness and regulation of the crypto sector.
- The government has granted licenses to nine digital asset platforms, including HashKey, which received its first license in November 2022 and remained one of Hong Kong’s few licensed exchanges until late 2024.
Standard Chartered, Animoca Brands, and HKT are leading the way in Hong Kong’s dollar-backed stablecoin debut, a major digital financial milestone. The venture is leading an age when regulated digital currencies combine traditional banks and blockchain-based finance as Hong Kong nears its Stablecoin Bill.
If successful, this endeavour might inspire other financial hubs to embrace stablecoins while preserving strict governance and financial stability.
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