The Hong Kong Monetary Authority (HKMA) recently completed a public consultation on stablecoin regulations.
As the city of Hong Kong prepares for the widespread adoption of digital assets in a regulated manner, officials are grappling with cases of cryptocurrency-related scams. In a bid to ensure maximum protection of investor funds, Hong Kong Treasury and Financial Services Secretary Christian Hui has noted that retail stablecoin trading is still not permitted. With stablecoin regulations in Hong Kong expected to take place late next year, Hui warned investors to exercise caution with retail stablecoins.
This comes after a local crypto exchange called JPEX pumped investors millions of dollars and charged customers up to $1,000 to facilitate withdrawals. In particular, JPEX tricked investors into earning up to 30 percent APY through stablecoin staking. Since the exchange advertised its services to novice traders through taxis, experienced investors were hardly affected as it was a direct scam that drained more than 180 million dollars.
Another fraudulent exchange that caused thousands of victims to lose their savings.
JPEX is a small crypto exchange in Hong Kong that offers almost 30% APY on stablecoin staking.
They also have an exchange token. $JPEX with a fully diluted value of 200 billion dollars, advertising in Hong… pic.twitter.com/vns0QnMOpn
— León.sol (@leon_only1) September 14, 2023
Hong Kong and digital assets
The Hong Kong market has attracted retail and institutional investors from the region looking to gain demo exposure to cryptocurrencies. Chinese banks are reported to be investing in the Web3 ecosystem through Hong Kong-based companies in a bid to catch up with their Singapore counterparts. Furthermore, the cryptoasset industry has outperformed most traditional investment instruments, including bond and stock markets.
The Hong Kong Monetary Authority (HKMA) recently completed a public consultation on stablecoin regulations. As a result, the HKMA intends to issue a clear regulatory framework for stablecoins before the end of 2024 to enable seamless adoption. Hong Kong authorities intend to take advantage of the high demand for digital assets from most of the region’s fintech startups in a bid to boost its local economy.
The move by Hong Kong authorities has taken most Western countries by surprise, as the crackdown on digital asset-related companies continues in the United States following the collapse of FTX. As more cryptocurrency-related businesses move away from the United States due to a lack of clear regulations, Hong Kong is opening its arms to all investors willing to abide by its cryptocurrency-related terms.
Stablecoin Market Outlook
The stablecoin market has grown significantly in recent years to reach a valuation of $123 billion with an average 24-hour trading volume of approximately $24.5 billion. Tether (USDT), Circle (USDC), and TrueUSD (TUSD) are the major retail stablecoins that have stood the test of time, more so the bear market.
With more institutional investors entering the stablecoin industry, as shown by PayPal Holdings Inc (NASDAQ: PYPL) and its new product, PYUSD.
next
Let’s talk about crypto, Metaverse, nft, CeDeFi and stocks, and focus on multi-chains as the future of blockchain technology. LET’S ALL WIN!
