As Hong Kong progresses with the adoption of cryptocurrency trading for particular person traders, a neighborhood official careworn that retail stablecoin trading is not but allowed.
The official supplied remarks on cryptocurrency regulation in Hong Kong throughout an internet funding committee assembly on Oct. 6, the native information company Ming Pao reported.
Cryptocurrency service suppliers have been broadly utilizing stablecoins like USDT as a serious trading asset as a result of their worth is designed to be stabilized by the peg to United States dollars or belongings like gold, Hui stated. However, some stablecoins have confronted critical volatility points and even collapsed in the previous, the secretary famous, including that reserve administration of stablecoins extremely impacts the value stability of traders’ rights to redeem fiat currencies.
Considering these dangers, retail trading of stablecoins will not be allowed till Hong Kong formally regulates stablecoins, Hui reportedly declared.
Hui additionally talked about that the shuttered native crypto trade JPEX — which was allegedly promoting its services in the region with out a license — was concerned in a critical fraud case, reflecting the necessity for greater supervision of the cryptocurrency market.
Cointelegraph has reached out to Hong Kong’s Securities and Futures Commission to ask about stablecoin trading guidelines in the nation. This article will probably be up to date pending new data from the regulator.
Related: Hong Kong police recover $11M worth of assets in JPEX case: Report
JPEX halted certain services on its platform as of mid-September 2023, citing a liquidity disaster triggered by “unfair treatment” from sure establishments in Hong Kong. JPEX shortly grew to become the middle of a serious scandal in the business, with Hong Kong authorities launching an investigation after receiving greater than 2,000 complaints from JPEX customers reporting nearly $180 million in losses.
The JPEX case got here just a few weeks after Hong Kong regulators officially allowed retail investors to commerce cryptocurrencies like Bitcoin (BTC) in early August 2023. The Hong Kong Monetary Authority is anticipated to introduce regulatory guidelines for the stablecoin market by the top of 2024.
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