The Hong Kong Stablecoin Oversight and Adjudication Office has stated that only fiat-collateralized stablecoins backed by legal tender will be permitted. This announcement clarifies the regulatory framework surrounding stablecoins within the region. The office emphasizes the importance of ensuring that stablecoins are tied directly to legal currencies, which is intended to enhance financial stability and protect users. This regulatory approach aims to mitigate risks associated with digital assets that lack a tangible backing. The guidelines set forth will impact how stablecoins are structured and operated in Hong Kong, reinforcing the necessity of compliance with established financial regulations.
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