The Hong Kong Monetary Authority launches consultation on legislative proposals to implement a regulatory regime for stablecoin issuers and announces the launch of a "sandbox" arrangement

The Financial Services and the Treasury Bureau of the Hong Kong Special Administrative Region and the Hong Kong Monetary Authority jointly issued a public consultation document today to collect opinions on legislative proposals for the supervision of stable currency issuers. The legislative proposals have taken into account the market and public opinions collected from the "Discussion Paper on Crypto-Assets and Stablecoins" released by the HKMA last year, ongoing discussions with holders, local market conditions and needs, and relevant international standards. The highlights are as follows: - Implementing a licensing system through the introduction of new legislation requiring all eligible fiat stablecoin issuers to obtain a license from the Monetary Authority; - Provides that only designated licensed institutions can provide services for purchasing fiat stablecoins, and only fiat stablecoins issued by licensed issuers can be sold to retail investors; - Prohibited promotion: issuance of fiat stablecoins by non-licensed issuers, or services for purchasing fiat stablecoins provided by non-designated licensed institutions; -Give authorities the necessary powers to adjust the scope of regulated stablecoins and activities in response to rapid changes in the virtual asset market; - Provide transitional arrangements to facilitate the smooth implementation of the regulatory system. The HKMA will also launch a "sandbox" arrangement to communicate regulatory expectations and provide compliance guidance to issuers who intend and have specific plans to issue fiat currency stablecoins in Hong Kong, while collecting their opinions on the proposed regulatory requirements to facilitate subsequent supervision. implementation of the system and ensuring that the system meets regulatory objectives.