An article unveils the mystery of the "sandbox" of stablecoin issuers of the Hong Kong Monetary Authority

Author: Bitke; Source: Koala Finance

On March 12, the Hong Kong Monetary Authority The "Sandbox" for stablecoin issuers was officially launched. According to the official statement, the Hong Kong Monetary Authority hopes to use the "Sandbox" to convey regulatory expectations to institutions interested in issuing fiat currency stablecoins in Hong Kong and collect participants' opinions on the proposed regulatory requirements. In this article, Koala Finance will provide an in-depth explanation of the specific content of this stablecoin issuer’s “sandbox” and what impact it will have on the development of Hong Kong’s virtual asset market.

First, let us understand a concept: sandbox

"Sandbox" is an emerging financial regulatory term in recent years, especially in the field of financial technology. Applied in the field of financial technology, "sandbox" mainly refers to the fact that regulatory agencies allow financial institutions to test and collect data and user opinions in a risk-controllable and smaller-scale environment before launching new services and products, thereby accelerating the development of related products and products. the timing of service launches and ensuring that services and products comply with regulatory requirements.

The "sandbox" for stablecoin issuers follows a similar concept. Before the regulatory system for stablecoin issuers is implemented, the Hong Kong Monetary Authority can use the "sandbox" to ", convey regulatory expectations and provide guidance to institutions planning to issue fiat currency stablecoins in Hong Kong, and allow regulatory authorities to collect opinions from "sandbox" participants on proposed regulatory requirements to ensure that the design of the system meets regulatory objectives. Participants in the “sandbox” can test the feasibility of proposed business models and communicate directly with the Hong Kong Monetary Authority to learn how to comply with future regulatory requirements.

Next, let us open the "sandbox" of Hong Kong stablecoin issuers to find out

For stablecoin issuers, how to apply to the Hong Kong Monetary Authority to participate in the "sandbox"? In fact, it is not difficult. Koala Finance has simply sorted out the application process:

First, if you are interested in applying to participate in the "Sandbox", you can send an email Express interest to the HKMA;

Second, the HKMA may contact the applicant during the assessment process to request more information. The time required for processing depends on a number of factors, including the complexity of the business model, the adequacy and quality of the information provided, and the speed and thoroughness of responses to the HKMA's follow-up questions and requests.

If you want to apply to the Hong Kong Monetary Authority, you need to pay attention to the following factors:

1. Applicants need to have a real intention and reasonable plan to issue fiat stablecoins in Hong Kong;

2. Applicants need to have specific plans to participate in the sandbox;< /p>

3. Applicants need to be able to meet reasonable expectations of the proposed regulatory requirements.

It should be noted here that the HKMA will consider a series of factors when evaluating "sandbox" applications. Successfully becoming a "Sandbox" participant does not mean that the "Sandbox" participant has obtained any recognition from the HKMA, or that the "Sandbox" participant is eligible to be subject to current or future supervision by the HKMA or other financial regulatory authorities in Hong Kong. After the regulatory system is implemented, "sandbox" participants who intend to apply for a license must still submit separate applications as required by the licensing authority in the future.

Other notes

• The Hong Kong Monetary Authority may pass Various forms of announcing participation in the Sandbox to the public, including disclosing approved participants.

• No one should make any announcement regarding the status of their application before being admitted into the Sandbox. After being admitted to the Sandbox, if participants wish to make an announcement regarding their participation in the Sandbox, they should obtain the HKMA's consent before making such announcement.

• Depending on the specific plans of the participants and the progress of the testing, the HKMA may appropriately adjust the requirements of the "sandbox".

• A "Sandbox" participant will be deemed to have exited the "Sandbox" under any of the following circumstances:

1. If the HKMA considers that a "sandbox" participant fails to act in accordance with the expected mode of operation specified in the application documents and relevant information considered by the HKMA, and/or the HKMA considers that the participant is no longer suitable Stay in the "sandbox"; or

2. If the "sandbox" participants decide on their own to exit in an orderly manner and notify the Hong Kong Monetary Authority in advance.

• The HKMA will announce to the public the termination of a participant's qualifications as it deems appropriate.

Industry reaction

After the Hong Kong Monetary Authority announced the launch of a "sandbox" for stablecoin issuers, the former president of the Hong Kong Monetary Authority, Chen Delin, founded Yuanbi Technology expressed its welcome to the Hong Kong Monetary Authority’s launch of the sandbox program. Yuanbi Technology also plans to launch the Hong Kong dollar stable currency HKDR, whose value is equivalent to the Hong Kong dollar at 1:1. It plans to be used in different business scenarios in Hong Kong and outside Hong Kong to promote Hong Kong’s Web3 ecological development.

Koala Finance believes that the "sandbox" of the Hong Kong Monetary Authority's stablecoin issuer will be "positive" for the development of the local virtual asset market in at least five aspects: < /p>

1. Promote the development of the stablecoin market

The "sandbox" will be used by stablecoin issuers Provide a compliant platform and lower the threshold for entering the Hong Kong market. This will attract more institutions to participate in stablecoin issuance, thereby promoting the development of the stablecoin market.

2. Improve market confidence

"Sandbox" will help to improve market confidence Confidence in stablecoins. By supervising stablecoin issuers, the HKMA will ensure the stability and security of stablecoins, thereby reducing investors' risk concerns about stablecoins.

3. Promote virtual asset transactions

Stable currency is an important medium for virtual asset transactions. The development of the stablecoin market will promote the growth of virtual asset transactions, thereby promoting the overall prosperity of the virtual asset market.

4. Strengthen financial supervision

The "sandbox" will provide the Hong Kong Monetary Authority with a Opportunities to learn about stablecoin issuance practices. By supervising the operation of the "sandbox", the Monetary Authority will accumulate relevant experience and formulate a more complete stablecoin supervision system.

5. Promote Hong Kong’s status as an international financial center

The launch of the "sandbox" demonstrates that Hong Kong Be open to the development of the virtual asset market. This will attract more international virtual asset companies to set up business in Hong Kong, thereby enhancing Hong Kong's status as an international financial center.

Overall, the launch of the Hong Kong Monetary Authority’s “sandbox” for stablecoin issuers will have a positive impact on the virtual asset market and will not only accelerate the development of the stablecoin market , enhance market confidence, promote virtual asset transactions, strengthen financial supervision, and further promote Hong Kong’s status as an international financial center.