Hong Kong’s central bank releases new guidelines for institutions interested in offering crypto custody services.
The Hong Kong Monetary Authority (HKMA) this morning published new guidelines for financial institutions looking to sell or distribute tokenized products.
According to the note, the HKMA encourages financial institutions to do their due diligence while researching potential digital asset products to protect themselves as institutions as well as individual consumers and investors.
The release also states that authorized institutions (AIs) may introduce and sell tokenized products themselves.
The release also places the onus of protecting consumers on the AIs.
“AIs are expected to act in the best interests of their customers and adequately disclose the relevant material information about a tokenized product, including key terms, features and risks, so that the customer can make an informed decision.”
Furthermore, it is up to the AIs to manage the risks of investing in crypto or tokenized products and to have approved policies, procedures and people.
Finally, regarding custodial services, the release states:
“AIs that also offer custody services for tokenized products must comply with expected digital asset custody standards as issued by the HKMA from time to time.”
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