Hong Kong to introduce stablecoin auditing guidelines in 1-3 years

Chairman of the Hong Kong Institute of Accountants and Financial Reporting, Sun Deji, said that he expects the government to wait a little longer before publishing guidelines on how to audit stablecoins.

According to a report by local media Sing Tao Daily, Financial Secretary and Accounting and Financial Reporting Council Chairman Sun Deji said that it would take a year at least and three years at most before the government would start issuing more guidelines on how to audit stablecoins.

This is because Sun Deji viewed that the stablecoin industry is still in its early stages, therefore if it were to rush on formulating a large number of detailed auditing standards now it could serve to “kill the industry in a matter of minutes.”

In addition, he predicted that comprehensive stablecoin auditing and accounting guidelines will likely be issued in the next one to three years.

Within the interview, Sun expressed optimism in the stablecoin industry, believing that it could bring in more young people into accounting and finance sectors as it progresses forward. Hong Kong has just released its Stablecoin Ordinance on August 1, with many firms already lining up to register for a stablecoin issuance license.

Waiting on Hong Kong stablecoin licenses

As previously reported by crypto.news, authorities are taking a more cautious approach by only issuing a handful of stablecoin licenses within this year. Despite growing demand in the market, with at least 77 firms expressing interest in obtaining a stablecoin license, the Hong Kong Monetary Authority maintains that only a few will be approved.

Although regulators have yet to issue any licenses, regulators have warned investors to exercise caution as trading risks and fraud began to rise following the implementation of Stablecoin Ordinance.

Not only that, stocks of companies that indicate interest in applying for a stablecoin issuer license would often see an increase in their stock prices after the announcement went viral.

Chinese firms in particular have grown interested in pursuing stablecoins through the Hong Kong Stablecoin Ordinance licensing regime.

Most recently, China National Petroleum Corporation, the Hong Kong arm of the Industrial and Commercial Bank of China, as well as the Hong Kong Bank of China are some of the Chinese firms which are reportedly eyeing a stablecoin issuer license.