Hong Kong Financial Secretary: Stablecoin issuers must comply with three main requirements: full reserve, redemption services, and governance

ChainCatcher news, according to the Hong Kong Economic Journal, the Hong Kong Financial Services and the Treasury Bureau stated that the SAR government needs to establish a regulatory framework for fiat-backed stablecoin issuers, regulating in a risk-based and pragmatic manner. The three main requirements include reserve management and stabilization mechanisms (for example, requiring issuers to ensure that fiat-backed stablecoins are fully backed by high-quality and highly liquid reserve assets), redemption requirements, and governance, knowledge, and experience regulatory requirements.

The Hong Kong Financial Services and the Treasury Bureau also suggested that only licensed fiat-backed stablecoin issuers, banks, licensed corporations, and licensed virtual asset trading platforms may sell fiat-backed stablecoins in Hong Kong or actively promote related services to the public in Hong Kong.

For existing stablecoin issuers, the proposed regulatory framework will also have corresponding transitional arrangements. Additionally, the Bureau expects that a regulatory framework for fiat-backed stablecoin issuers that is appropriate and in line with international regulatory recommendations can provide sufficient protection for users, addressing potential risks to monetary and financial stability, allowing the virtual asset ecosystem in Hong Kong to develop sustainably and responsibly.