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Hong Kong aims to become a preferred country for both the cryptocurrency market and the blockchain sector with its steps. However, a statement by an official drawing attention to the stablecoin field raised some questions. According to the official, stablecoin trading is not yet allowed in the region. Hong Kong plans to increase regulations in the crypto market and aims to propose regulatory bills for the stablecoin market by the end of 2024.
No Permission for Stablecoin Trading
According to Hong Kong’s Financial Services and Treasury Secretary Christian Hui, the Hong Kong government did not allow the necessary regulations for important stablecoin issuers such as Tether and USD Coin. This prevents individual investors from buying or selling these crypto assets.
According to a report compiled by Hong Kong’s local news agency Ming Pao, the official attended an investment committee meeting on October 6. During the online meeting, the minister made statements regarding cryptocurrency asset regulations in Hong Kong.
Hui specifically stated that stablecoin assets like USDT are an important bridge for cryptocurrency asset trading. The minister also mentioned the problem of stablecoins losing their value in the past, stating that these tokens significantly affect price stability in the crypto market.
What Happened in the JPEX Case?
Due to the problems experienced with stablecoins and the potential future issues, Hui announced that the government will not allow individual users to use stablecoins. After his statements, the minister also talked about the JPEX exchange, which is alleged to provide unlicensed services in the region. He stated that the cryptocurrency market needs high levels of supervision following the government’s decision.
As it is remembered, JPEX had ceased its services in September. The exchange officials stated that this occurred due to unfair allegations from regulatory authorities in Hong Kong, leading to a liquidity crisis in the exchange. An investigation was launched into this incident, which shook the country in a short period of time. The investigation mentions a loss of $180 million and more than 2,000 complaints.
In early August 2023, Hong Kong allowed individual investors to trade cryptocurrency assets such as Bitcoin, and just a few weeks later, the country was shaken by the JPEX case. It is expected that the Hong Kong Monetary Authority will propose regulatory bills for the stablecoin market by the end of 2024.
