Hong Kong Will Relax Bank Cryptocurrency Regulations

According to Caixin, the Hong Kong Monetary Authority (HKMA) has declared its intention to reduce the capital requirements for regional banks that hold cryptocurrencies.

To provide clarification on the guidelines that will be put into effect at the start of 2026, the regulator has made a draft paper available for public review.

If cryptocurrency issuers can take the necessary precautions to avoid and address problems, the recommendations center on lowering capital requirements for banks.

The classification process in compliance with international financial norms is also described in the document. As a result, the HKMA will apply Basel standards to the banking industry in Hong Kong.

Digital assets launched on public blockchains are the main topic of the document. Such cryptocurrencies may be subject to less stringent standards under the proposed regulations.

When it comes to the implementation of cryptocurrency laws, Hong Kong is still ahead of mainland China. The authority has been enforcing stablecoin market laws since August 1.

China, however, is concentrating on its own digital currency. Beijing is thinking of permitting the usage of “stablecoins” backed by the yuan.

Journalists from The Economist had previously raised concerns about the possible failure of Chinese stablecoins, pointing to stringent capital movement regulations and a restricted supply of offshore assets as causes.

 

 

 

 

 

 

 

 

 

 

 

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