Specific licensing regime needed for fiat-referenced stablecoins

Hong Kong is still a leader in tokenised asset markets with the government’s multi-currency digital green bond issuance.

The Hong Kong Monetary Authority (HKMA) will need to introduce a specific licensing regime for issuers of fiat-referenced stablecoins to ensure stability and compliance in the growing digital payments space.

Linklaters said in a report that Hong Kong’s participation in Project mBridge, a multi-central bank initiative for cross-border digital payments, has reached the Minimum Viable Product (MVP) stage, highlighting the city’s efforts to enhance international payment efficiency using central bank digital currencies.

The HKMA has also issued new AI governance guidelines, focusing on managing risks associated with Generative AI in financial institutions.

These guidelines aim to enhance operational resilience and ensure compliance as AI adoption accelerates in the financial sector, Linklaters said.

In addition, Linklaters noted Hong Kong remains a leader in tokenised asset markets, with the government’s multi-currency digital green bond issuance showcasing its commitment to advancing financial technology and sustainability.