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Coin Geek
18 hours ago
- Business
- Coin Geek
Hong Kong shapes future of mining with stablecoin regulation
Getting your Trinity Audio player ready... Hong Kong, a global financial hub, is leading the charge with its proposed stablecoin regulatory framework, set to take effect later in 2025 under the 'Stablecoin Issuers (Regulation and Provision of Custody Services) Ordinance.' This initiative, poised to be the world's first comprehensive stablecoin regulation, aims to foster innovation while ensuring financial stability and investor protection. The Hong Kong Monetary Authority (HKMA) is preparing to roll out a pioneering regulatory framework for fiat-backed stablecoins—digital currencies tied to fiat currencies like the USD or HKD to maintain stable value—later in 2025. Under the proposed ordinance, stablecoin issuers must secure an HKMA license, requiring full reserve backing with high-quality liquid assets, such as cash or government bonds, held in segregated accounts to protect users in case of issuer insolvency. Licensees must comply with rigorous anti-money laundering (AML) and counter-terrorism financing (CTF) regulations, undergo regular audits, and implement robust risk management systems to ensure operational reliability. The framework also mandates licensing for custody service providers, such as those offering stablecoin wallets or asset storage, ensuring comprehensive oversight across the stablecoin lifecycle. The HKMA plans to ban algorithmic stablecoins—those relying on automated protocols rather than asset reserves—due to their volatility, as seen in past failures like TerraUSD. By establishing these standards, Hong Kong aims to create a transparent and secure digital asset hub, capitalizing on a global market projected to grow from $5.08 billion in 2023 to $15.39 billion by 2032. Hong Kong's proposed stablecoin regulations could significantly influence the digital currency ecosystem, particularly mining. Stablecoins, whose transactions surpassed those of Visa in Q1 2025, are critical for digital asset markets, serving as a stable bridge between volatile assets like BTC and fiat currencies. A regulated stablecoin environment in Hong Kong is likely to attract major issuers like Tether (USDT) and Circle (USDC), enhancing liquidity and stability for digital asset trading, which directly impacts miners. For miners, stablecoins are a key tool for managing financial operations. Miners, such as those using Canaan's (NASDAQ: CAN) Avalon Q or CleanSpark's (NASDAQ: CLSK) industrial rigs, often convert BTC earnings into stablecoins to hedge against price volatility, ensuring predictable revenue for operational costs like electricity and hardware. A trusted stablecoin framework in Hong Kong could streamline these transactions, reducing counterparty risks and transaction fees. This is particularly relevant as the global BTC mining hash rate hit 700 exahashes per second in June, intensifying competition and making efficient cash flow management critical. Moreover, Hong Kong's regulations could bolster the city-state's role as a digital asset hub, potentially attracting mining-related businesses, such as hardware manufacturers or cloud mining platforms, to establish operations. For instance, platforms like RI Mining or AAS Miner, which emphasize sustainable practices, could leverage Hong Kong's clear regulatory environment to expand services and support miners globally. Increased stablecoin adoption could also drive transaction demand, indirectly boosting mining profitability in a high-price environment. Implementing the stablecoin framework poses challenges. Compliance costs, such as hiring auditors or upgrading systems, may strain smaller issuers, potentially consolidating the market around larger players like Tether. Overregulation could also push startups to jurisdictions with lighter rules, such as Dubai or Singapore, though Hong Kong's financial reputation provides a competitive edge. Enforcing the proposed ban on algorithmic stablecoins will be complex in a decentralized digital landscape, requiring robust monitoring and international coordination. Globally, Hong Kong's initiative stands in contrast to varied regulatory approaches. Norway is considering restrictions on block reward mining due to energy concerns, while Russia's new mining registry aims to curb illegal operations. The United States lags in comprehensive digital asset legislation, with debates over bills like the CLARITY Act ongoing. Hong Kong's proactive stance could set a global benchmark, but it must balance strict oversight with flexibility to retain innovators. For miners, regulatory clarity in Hong Kong could inspire similar frameworks elsewhere, potentially easing cross-border operations but also raising compliance burdens. Hong Kong's planned stablecoin regulations, expected to launch later in 2025, position the city as a global leader in digital asset governance. By fostering a secure environment for stablecoins, the framework could enhance liquidity for BTC, streamline miners' financial operations, and attract digital asset-related businesses. If the HKMA navigates compliance challenges and global competition effectively, Hong Kong could redefine the Bitcoin landscape, setting a model for balancing regulation and innovation in a rapidly evolving market. Watch: Breaking down solutions to blockchain regulation hurdles title="YouTube video player" frameborder="0" allow="accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share" referrerpolicy="strict-origin-when-cross-origin" allowfullscreen="">
Reuters
a day ago
- Business
- Reuters
Weak bunker margins prompt Singapore suppliers to curb fleets, sources say
SINGAPORE, July 15 (Reuters) - Lacklustre fuel demand at top global ship refuelling hub Singapore is squeezing margins for bunker suppliers and prompting some to pare back barge operations, industry sources said. Marine fuel sales in key refuelling ports globally have slowed this year as the shipping sector grapples with uncertainty over geopolitics and trade tariffs, depressing bunker prices and making it less economical to operate fuel barges. Typically, bunker fuel delivered from barges in Singapore must be sold at least $7 a metric ton above the ex-wharf price for oil supplied from terminals to break even, however, the spread has narrowed below $4 this year for both low-sulphur and high-sulphur marine fuel grades, trade sources said. TFG Marine, majority-owned by Trafigura, is operating three to five barges in Singapore compared with nine barges last year, according to five industry sources. The company is focusing on ex-wharf trade instead of direct delivery to ships, they said. Trafigura declined to comment. Prices of high-sulphur marine fuel have been depressed by plentiful supplies, while premiums for low-sulphur supplies have been stuck in a narrow range since the start of the year. "It has been an extended period of pain for physical suppliers this year," a Singapore-based bunker trading executive said. "Suppliers can't stop doing physical sales completely so the short-term remedy is to release barges," he said. Sinopec Fuel Oil, which operates about 10 barges in Singapore, has trimmed vessels leased under contract of affreightment (COA) to 1-2 per month, down from 2-3 previously, as volumes dipped, while keeping the number of barges under time charter (TC) stable, a source with knowledge of the matter said. Under COA, shipowners retain control over vessels and are committed to delivering a certain number of cargoes, while TCs give charters the control over ships. Separately, SK Energy plans to reduce its Singapore barge fleet later this year, two sources familiar with the matter said. The sources declined to be named as they were not authorised to speak to media. Sinopec did not respond to a request for comment. SK Energy declined to comment. The scaling back comes as the number of barges, or bunker tankers, in Singapore rose to 214 in February, up from 206 last May, official data showed. "The total number of barges has increased this year with some companies bringing in newly-built ones ... but demand is so stagnant this year, premiums are so bad, that many people are giving up barges," a trader from a Singapore-based bunker supplier said. Bunker fuel sales in Singapore dipped to 26.98 million metric tons (940,000 barrels per day) in the first half of 2025, down 1% on year, official data showed.
