Stablecoins bill brings stricter oversight, opportunity to Hong Kong

The digital tokens could support cross-border payments and smart escrow.

- 

Hong Kong’s recently passed Stablecoins bill raises the bar on transparency and compliance, whilst unlocking opportunities for innovation in the digital asset space, analysts said.

“Issuers will need to overhaul treasury transparency, implement robust real-time reserve attestations, and establish clear redemption mechanisms,” Elena Tzvetinova, chief operating officer at Reasoon Ltd., a London-based artificial intelligence fintech, told Asian Banking & Finance.

Stablecoin issuers should be clear about the reserves backing their tokens and provide mechanisms for users to redeem them for cash. Many, however, may fall short of meeting the bill's standards.

“Many lack sufficient internal controls or risk frameworks that meet the bill's standards,” Tzvetinova said. Eunice recently rolled out a stablecoin due diligence and monitoring solution designed to support compliance and risk oversight.