Hong Kong monetary authority regulate stablecoin issuers

The Hong Kong Monetary Authority (HKMA) has announced the launch of a new stablecoin issuer sandbox arrangement. This initiative is part of the HKMA’s plan to regulate stablecoin issuers in Hong Kong. It aims to provide a platform to communicate supervisory expectations to parties interested in issuing fiat-referenced stablecoins in Hong Kong, and to gather feedback on proposed regulatory requirements.

Applicants who wish to participate in the sandbox arrangement must have a genuine interest in developing a stablecoin issuance business in Hong Kong, supported by a reasonable business plan. Under this arrangement, their proposed operations will be conducted within a limited scope and in a risk-controlled manner. Detailed information about the sandbox arrangement can be found in the Annex.

To ensure transparency, the HKMA will maintain an up-to-date list of the participants on its website, which will be regularly updated. This will allow interested parties to stay informed and up-to-date with the latest developments.

Mr Eddie Yue, Chief Executive of the HKMA, emphasized the importance of the sandbox arrangement as a platform for the HKMA and the industry to exchange views on the proposed regulatory regime. He noted that the arrangement will aid in formulating fit-for-purpose and risk-based regulatory requirements, which are crucial for promoting the sustainable and responsible development of the stablecoin issuance business.