Hong Kong will begin to implement its Stablecoin ordinance on August 1, which makes it illegal to offer or promote unlicensed Fiat-Referenced Stablecoins (FRS) to retail investors.
The new law Introducing Criminal penalties up to a level of five fine 50,000 dollars of Hong Kong (about $ 6,300) and a maximum sentence of six -month imprisonment.
The Hong Kong Monetary Authority (HKMA), the central bank of the administrative special region, Issued A public warning on Wednesday, urging investors to guide unlicensed offerings to prevent accidental violations of the law.
HKMA chief executive Eddie Yue said the warning that the upcoming regulation aims to bring credibility and stability to the budding stablecoin budding sector while protecting investors from fraud and excessive speculation.
Hong Kong turned away with stablecoin “Euphoria”
Yue said that a frenzy in the market -filled by the hype surrounding Stablecoin’s announcements has led to unjust stock prices and trade volume spikes. “It seems necessary to further live in Euphoria,” Yue wrote in Wednesday’s announcement.
On Thursday, Bloomberg reported With as many as 50 companies applying for Stablecoin licenses. In June, Gotai Junin shares Jump 300% after the banking license was expanded to include digital assets.
Yue said that while many institutions approached the central bank to express interest in obtaining a StableCoin license, many proposals were unclear, concepts and no realistic implementation plans.
“They also failed to live together and concrete plans as well as implement roadmaps, let you show their awareness of the risks and capabilities of managing them,” Yue said.
He added that while some provide viable cases of use, some lack the technical expertise to issue stablecoins and the ability to manage financial risks.
As a result, Yue said there are few licenses to be given first, while most applicants should not expect to approve.
Related: Shenzhen issued a warning to Stablecoin scam, illegal crypto recruitment
Crypto advertising with other constituents
Like Hong Kong, other jurisdictions, such as the European Union, prohibit unlicensed companies from promoting crypto products.
The Crypto-Assets regulation markets (MICA) imposing More financial fines of at least 5 million euros (around $ 5.8 million) or 3% to 12.5% of the annual shifting companies for creatures or individuals have found violation of its provisions. However, regulations do not include imprisonment.
In the United Kingdom, the Financial Conduct Authority (FCA) struggles to implement its policies. Like January, Only about half of that -flag illegal crypto ads was taken.
Hong Kong’s approach is one of the strictly to this day, adding criminal penalties to its consumer protection toolkit while aiming to balance fintech change with regulatory administration.
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