Hong Kong Monetary Authority Calls for Regulation of Cryptocurrencies

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The Hong Kong Monetary Authority (HKMA) has flagged regulation of crypto-assets in the wake of a mass meltdown in global crypto markets since the start of 2022.

HKMA Executive Director Edmond Lau said that monetary authorities cannot underestimate challenges in relation to the growth of cryptocurrencies, and that they need to be included in regulatory frameworks.

“Growth in crypto-assets is accelerating, and they currently account for around 2% of global financial assets,” said Lau according to local media reports on 24 June.

“Because related assets can be used for payments and transactions and their usages are broad, they are tightly connected are closely connected to the mainstream financial system, and related challenges cannot be underestimated.

“Some stablecoin prices have recently seen high volatility, which sends the market a clear message to markets, and shows the potential risk of related assets.”

Lau said that the HKMA will apply the method of “the same level of regulation for the same level of risk” to the issue of cryptocurrency regulation, as well as make reference to practices implemented by other legal jurisdictions.

Lau’s remarks arrive just after the nearby city of Shenzhen issued a warning against cryptocurrency speculation. In late 2017 Beijing placed a ban on cryptocurrency trading platforms and initial coin offerings (ICO’s).