Hong Kong officials outline new approach to cryptocurrency regulation: embrace innovation but require a strict framework, with step-by-step development of stablecoins

【Chain Wen】Recently, officials from relevant departments shared their latest views on the development of virtual currencies in public, attracting industry attention. The officials believe that virtual currencies represent the direction of financial innovation and should be embraced actively, but they also pointed out several core risks at the current stage: the confidentiality features of blockchain technology may lead to incomplete investor protection mechanisms, anti-money laundering monitoring is challenging, and financial stability faces potential threats.

For this reason, regulatory authorities stated that a cautious approach must be taken, incorporating virtual currencies into the existing financial regulatory framework and establishing a comprehensive risk prevention and control system. At the same time, officials expressed reservations about large-scale promotion of virtual currency investment to the general public, emphasizing the need to first improve investor education and risk warnings.

It is worth noting that regarding the development direction of stablecoins, officials revealed a phased approach. They indicated that stablecoin products will be developed gradually, and after completing the foundational work in the first phase, they will consider launching stablecoin schemes linked to gold or other assets. This shows that regulatory authorities adopt a relatively open yet cautious stance towards stablecoin innovation—neither rejecting innovation nor allowing risks to go uncontrolled at any step.