Hong Kong regulator canvasses views on ways to regulate crypto assets

A logo sits on the windows of the offices of La Maison du Bitcoin bank in Paris, France, on Thursday, Nov. 23, 2017. Photographer: Christophe Morin/Bloomberg

Hong Kong‘s de facto central bank invited comment on Wednesday about ways to regulate crypto assets and stablecoins, with the aim of adopting a regulatory framework by 2024 in which the policy spectrum could range from no action to a blanket ban.

The rapid growth of cryptocurrencies and, in particular, stablecoins, or digital assets pegged to traditional currencies, has drawn attention from regulators worldwide, who fear they could put the financial system at risk if not monitored.

The global market value of crypto assets stands at about $2.2 trillion, pointing to their growing inter-connectedness with the mainstream financial system, said Eddie Yue, the chief executive of the Hong Kong Monetary Authority (HKMA).

“We place emphasis on issues that may affect the public’s confidence in, and the safety, efficiency, and soundness of, our payment systems, and accord appropriate priority to the protection of users,” the HKMA said in a paper on the topic.

It is seeking feedback from the public and stakeholders by March 31, in a more wide-ranging effort than a recent exercise by the territory’s Securities and Futures Commission (SFC) that focused only on trading platforms for virtual assets.

In its paper, the HKMA focused on the wider implications of stablecoins that may be used in payments, along with aspects of investor protection relating to crypto assets, and regulated institutions’ interface with crypto assets.

It listed five possible choices for regulating crypto assets, ranging from no action to a blanket ban.

Regulated institutions are required to “critically evaluate” their exposures to different types of risks and adopt risk-mitigation measures before setting up ties with providers of crypto asset services, the paper added.

The consultation comes against the backdrop of concerns among policymakers worldwide that crypto assets could be used for illicit purposes, or to take advantage of unsuspecting consumers.

Such worries stem from the complexity and volatility of cryptocurrencies, as well as wildly varying standards around aspects of disclosure, reserves and consumer protection.

Reuters

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
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Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.