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A Stablecoin Pilot in China?
There is currently no universally agreed standard for stablecoins, let alone a regulatory framework governing them. But the market is large – and growing fast. Since the beginning of 2020, the estimated total market value of stablecoins skyrocketed from $5.9 billion to about $130 billion.
HONG KONG – The Hong Kong Monetary Authority (HKMA) and Financial Services and the Treasury Bureau (FSTB) are working to establish a regulatory regime for stablecoin issuers in the territory as soon as possible. Asset managers and fintech firms are reportedly following the effort very closely. Other governments should do so as well.
By Andrew Sheng and Xiao Geng
Stablecoins are a type of cryptoasset that is supposed to maintain a value relative to a target currency. “Collateralized” stablecoins are backed by a pool of reserve assets, whether fiat currencies, other cryptoassets, or commodities. But not all stablecoins are backed by reserve assets: unbacked stablecoins seek to maintain a stable value by other means, such as through algorithms that limit their supply, creating a market value.
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