Hong Kong on Friday issued its first licenses for fiat-backed stablecoins, marking a significant milestone in the city’s efforts to establish regulated digital currencies in global finance and trade.

According to the regulators’ proposal, broker-dealers are required to obtain a license to provide services for trading crypto assets. The license also applies to over-the-counter cryptocurrency operations. The need to obtain permission will equate crypto dealers with traditional brokers, who are required to comply with securities laws.

Starting August 1, new regulations have come into effect in Hong Kong, requiring stablecoin issuers to verify the identity of every holder of their tokens by enforcing Know Your Customer (KYC) procedures.

Other

The Hong Kong Monetary Authority (HKMA), which serves as the de facto central bank of the Special Administrative Region, has finalized its regulatory framework for stablecoin issuers.