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Hong Kong ready to issue first stablecoin licenses in March, Financial Secretary says

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Hong Kong ready to issue first stablecoin licenses in March, Financial Secretary says

HONG KONG — Hong Kong is ready to begin issuing the first of its stablecoin licenses next month, the Special Administration Region’s Financial Secretary said Wednesday.

Hong Kong will only issue a small batch of licenses initially, Hong Kong’s Paul Chan Mo-Po said Wednesday at CoinDesk’s Consensus Hong Kong conference.

“In giving our licenses, we ensure that licensees have novel use cases, a credible and sustainable business model and strong regulatory compliance capabilities,” he said.

Hong Kong is also moving to finalize its licensing regime for custodian service providers, he said, and looking to introduce legislation this summer.

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“Together with the framework already in place, this will ensure that our regulatory regime comprehensively covers the team of the digital asset ecosystem,” he said.

Speaking more broadly, Chan pointed to three trends in particular maturing at this moment: The growth of tokenized products in the real world, increasing interaction between decentralized finance (DeFi) and traditional finance and the growing ties between artificial intelligence (AI) and digital assets.

“Tokenization initiatives are moving from proof of concept to real world deployment supported by more institutional adoption government bonds, money market funds and other more traditional financial instruments are increasingly being issued onchain, using digital ledgers to enhance settlement efficiency enable fractional ownership and unlock liquidity in assets that have traditionally been less liquid.”

He also pointed to increasing growth in AI.

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“As AI agents become capable of making and executing decisions independently, we may begin to see the early forms of what some call the machine economy, where AI agents can hold and transfer digital assets, pay for services and transact with one another onchain,” Chan said.

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Crypto World

CFTC Chair Says Agency is Ready to Oversee Entire Crypto Market

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CFTC Chair Says Agency is Ready to Oversee Entire Crypto Market

Michael Selig, US President Donald Trump’s nominee leading the Commodity Futures Trading Commission (CFTC), said the agency was prepared to oversee the entire $3 trillion crypto industry, with no timeline for Congress to pass a crucial market structure bill.

In a Wednesday statement about his first 100 days as CFTC chair, Selig said that the commission was “ready to take responsibility” for the crypto market and reiterated his claim that it was the sole regulator to oversee prediction markets.

His comments come as the US Senate considers the CLARITY Act, a crypto market structure bill that has been effectively stalled in committee amid discussions over stablecoin yield and other issues.

“The same regulatory clarity being delivered to the crypto industry is being developed for prediction markets, which can serve as powerful tools for information discovery and are regulated by the CFTC under the Commodity Exchange Act,” said Selig.

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Under Selig, who was confirmed by the Senate in December, the CFTC has adopted many policies signaling that the agency would soften its enforcement and regulation of digital assets compared to previous administrations. In March, the agency announced a memorandum of understanding with the Securities and Exchange Commission (SEC) as part of efforts to coordinate on regulation, including digital assets.

Related: Crypto exchange KuCoin agrees to $500K settlement, ending CFTC case

Although early drafts of the market structure bill suggested the legislation could give the CFTC additional authority to oversee digital assets, the SEC is expected to continue regulating cryptocurrencies it considers to be securities.

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Lawmakers pressing CFTC on insider trading claims over prediction markets

US state authorities and federal lawmakers have been targeting prediction market platforms like Kalshi and Polymarket over alleged violations of gaming laws and claims of politicians using insider information to profit.

While many of the state-level actions continue to be litigated in court, Selig has claimed that the CFTC has “exclusive jurisdiction” over prediction markets and threatened legal action against any challenges to its authority.

In a Tuesday event, CFTC enforcement director David Miller said that the agency’s position was that event contracts on prediction markets were not “gaming” but rather “swaps” that fall under its purview.

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Some lawmakers have also proposed legislation to ban elected officials with insider information from profiting from event contracts after suspicious trades on military actions involving Iran and Venezuela.

Magazine: A newbie’s guide to surviving crypto winter