Five years ago, when Diem (formerly known as Libra) was announced to the market, the potential and need for a revolution in digital payments was clear. However, the readiness of central banks, regulators and regulatory framework was lacking.

Standard setters including the Financial Stability Board, Bank of International Settlements and the Financial Action Task Force have been working with regulatory bodies to consider current gaps and how regulators may need to respond. Consultations and proposals for regulatory change are now showing the likely shape that regulation will take. Both existing incumbents and a number of new entrants are now able to plot their course for adoption, and perhaps acceptance, within the regulatory perimeter.

In this briefing, we will examine the current situation in Hong Kong and how we anticipate the regime for stablecoins developing.