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On August 1, Hong Kong authorities introduced a highly anticipated regulatory framework targeted at overseeing fiat-based stablecoin operations in the Asian country. While this regime may be considered stringent by mandating more requirements for stablecoin operators, the government’s recognition of this class of digital assets appears highly encouraging for investors.
According to a recent Reuters report, Hong Kong’s new stablecoin regime has sparked a wave of fundraising activity among fintech companies. Notably, the Asian nation now requires all intending stablecoin issuers to obtain a license from the Hong Kong Monetary Authority (HKMA). Meanwhile, existing businesses have been granted a six-month transitional grace period.
Beyond licensing, Hong Kong’s new stablecoin regulations are expected to also cover other operational areas, including reserve asset management, anti-money laundering measures, and redemption systems etc. Following the enforcement of this new regime, Reuters reports that a minimum of 10 listed Hong Kong Fintechs have raised $1.5 billion via share placements with intentions of investing in stablecoins, blockchain payment systems, and regular cryptocurrencies.
A prominent company in this group is the digital asset and blockchain company OSL Group, which has now completed $300 million of equity financing in late July. Other notable names include Dmall Inc. and leading AI company SenseTime Group.
