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Preparations to regulate crypto assets in Hong Kong, can also be banned

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HIGHLIGHTS :

  • Regulators Around the World Are Worried About the Rapid Growth of Cryptocurrencies
  • HKMA has sought feedback from stakeholders by March 31 in this regard
  • Preparations are being made to make laws regarding cryptocurrencies in some countries.

Regulators Around the World Are Worried About the Rapid Growth of Cryptocurrencies

Hong Kong’s Central Bank has sought comment on the way it regulates crypto assets and stable coins. Its goal is to implement a regulatory framework by 2024 in which a policy can be made from non-action to a complete ban on crypto assets. The rapid growth of cryptocurrencies, and in particular stablecoins, has caught the attention of regulators around the world. There are apprehensions that if crypto-assets are not monitored, it may pose a risk to the financial system.

HKMA has sought feedback from stakeholders by March 31 in this regard

The global market for crypto assets is around $2.2 trillion (about Rs 16,25,741 crore). Eddie Yue, Chief Executive of the Hong Kong Monetary Authority (HKMA), said that the integration of crypto assets with the financial system is increasing. “We address issues that could affect the security, robustness, and efficiency of our payment systems and prioritize the safety of users,” the HKMA said in a paper on the subject. The HKMA has sought feedback from the public and stakeholders by March 31 in this regard. It emphasizes the broad implications of stablecoins that can be used for payments. Apart from this, there are also aspects of protecting the investors associated with crypto assets.

The HKMA has provided five possible options for regulating crypto assets. These range from taking no action to banning completely. The paper states that regulated institutions will have to undertake various risk assessments and risk mitigation measures before engaging with providers of crypto asset services.

Preparations are being made to make laws regarding cryptocurrencies in some countries.

Governments in many countries are concerned that crypto assets could be used for illegal activities or could harm users with little knowledge. The reason behind this is the complexity of crypto assets and the high volatility in them.

In some countries, preparations are also being made to make laws regarding cryptocurrencies. In India also, the central government has planned to bring a law related to cryptocurrencies. Some organizations like Swadeshi Jagran Manch in India are also demanding a complete ban on cryptocurrencies.

Governments in many countries are concerned that crypto assets could be used for illegal activities or could harm users with little knowledge. This is due to the complexity and high volatility of crypto assets.

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