The Hong Kong Monetary Authority (HKMA) has published a draft paper for public comment proposing softer capital requirements for banks that hold or provide services for crypto assets. The guidance is intended to be clarified and implemented early next year.
The draft says banks could face lower capital requirements if issuers and custodians put in place appropriate measures to detect, prevent and respond to crypto-specific risks, including operational controls and governance frameworks. The proposals aim to clarify how existing capital rules apply to tokens and related services.
Hong Kong has recently moved toward a more industry-friendly stance: its long-awaited stablecoin rules came into effect last month after a wave of issuer applications. Regulators say the changes are designed to support safe growth of crypto activity in the city.
For banks and institutional players, relaxed capital treatment could reduce the cost of offering custody, trading and custody-related services and accelerate institutional adoption. That said, any relief will likely be conditional on strict compliance, risk management and disclosure requirements.
Stakeholders should watch the public consultation that is now open and follow the final wording when the HKMA adopts the measures. The central bank did not respond to requests for comment.
Source: Caixin. Read the original coverage for full details.