Disclaimer: Information found on CryptoreNews is those of writers quoted. It does not represent the opinions of CryptoreNews on whether to sell, buy or hold any investments. You are advised to conduct your own research before making any investment decisions. Use provided information at your own risk.
CryptoreNews covers fintech, blockchain and Bitcoin bringing you the latest crypto news and analyses on the future of money.
As Hong Kong moves forward with the integration of cryptocurrency trading for individual investors, a local official emphasized that retail trading of stablecoins is currently prohibited.
Hong Kong has yet to implement regulations for stablecoins such as Tether (USDT) or USD Coin (USDC), which means that retail investors are not permitted to trade these assets, according to Christian Hui, Hong Kong’s Secretary for Financial Services and the Treasury.
The official made comments regarding cryptocurrency regulation in Hong Kong during an online investment committee meeting on Oct. 6, as reported by the local news agency Ming Pao.
Cryptocurrency service providers have widely utilized stablecoins like USDT as a primary trading asset due to their value being intended to be stabilized by a peg to United States dollars or commodities like gold, Hui stated. However, some stablecoins have experienced significant volatility issues or even failures in the past, the secretary pointed out, adding that the management of reserves for stablecoins greatly influences the price stability related to investors’ rights to redeem fiat currencies.
In light of these risks, retail trading of stablecoins will remain prohibited until Hong Kong officially regulates them, Hui reportedly asserted.
Related Posts
Hui also noted that the now-closed local crypto exchange JPEX — which was allegedly marketing its services in the area without proper licensing — was implicated in a serious fraud case, highlighting the necessity for increased oversight of the cryptocurrency market.
Cointelegraph has contacted Hong Kong’s Securities and Futures Commission to inquire about the rules governing stablecoin trading in the region. This article will be updated as new information from the regulator becomes available.
Related: Hong Kong police recover $11M worth of assets in JPEX case: Report
JPEX suspended certain services on its platform as of mid-September 2023, citing a liquidity crisis caused by “unfair treatment” from specific institutions in Hong Kong. JPEX quickly became the focal point of a significant scandal in the industry, with Hong Kong authorities initiating an investigation after receiving over 2,000 complaints from JPEX users reporting nearly $180 million in losses.
The JPEX incident occurred a few weeks after Hong Kong regulators officially permitted retail investors to trade cryptocurrencies like Bitcoin (BTC) in early August 2023. The Hong Kong Monetary Authority is anticipated to release regulatory guidelines for the stablecoin market by the end of 2024.
Magazine: Blockchain detectives — Mt. Gox collapse saw birth of Chainalysis
