JD.com wants to print its own money? JD.com Group enters Hong Kong and is approved to issue a 1:1 Hong Kong dollar stablecoin in Hong Kong. Hong Kong regulators have given the nod

The Hong Kong Monetary Authority (HKMA) recently updated its website to include JD Group's JD CoinChain Technology (Hong Kong) Co., Ltd. in the sandbox regulatory project. This sandbox project is an experimental platform used by the HKMA to test cryptocurrency stablecoins. The current inclusion does not mean that it has obtained the HKMA's formal recognition or stablecoin issuance license.

JD will issue a stablecoin based on a public blockchain and pegged to the Hong Kong dollar at a 1:1 ratio in Hong Kong

Cailianshe reported on July 24 that JD will issue a cryptocurrency stablecoin pegged to the Hong Kong dollar at a 1:1 ratio in Hong Kong. According to the official website of JD CoinChain Technology (Hong Kong), a company under JD Technology Group, JD Stablecoin is a stablecoin based on a public chain and pegged to the Hong Kong dollar (HKD) at a 1:1 ratio, which will be issued on a public blockchain. Its reserves are composed of highly liquid and credible assets, which are securely stored in independent accounts of licensed financial institutions, and the integrity of the reserves is strictly verified through regular disclosures and audit reports.

JINGDONG Coinlink Technology Hong Kong Limited is a financial company under JD.com, which was specially registered in Hong Kong in March 2024. Its main business includes digital currency payment system and blockchain infrastructure construction.

There are three companies that have been regulated by the Hong Kong Monetary Authority this time, namely JD Coinlink Technology, RD InnoTech Limited, and the joint applicants Standard Chartered Bank Hong Kong, Animoca Brands Limited and Hong Kong Telecom Limited.

Other companies included in the sandbox supervision

The other two companies included in the sandbox supervision this time:

1. RD InnoTech Limited: This company has DeFi, digital payment and JD Technology background, and plans to launch a Hong Kong dollar stablecoin called HKDR, providing users with decentralized trading, cryptocurrency lending and yield farming services.
2. Joint applicant company of Standard Chartered Bank Hong Kong, Animoca Brands Limited and Hong Kong Telecom Limited: Although the specific situation is still unclear, these three companies are well-known in the industry. Standard Chartered Bank Hong Kong is setting up a Bitcoin and Ethereum trading desk, Ansai Group focuses on blockchain games and digital entertainment business, and Hong Kong Telecom is the largest integrated telecommunications service provider in Hong Kong.

What is the "Sandbox" program?

The Hong Kong Monetary Authority (HKMA) launched the "Sandbox" project in March 2024 to promote the sustainable and responsible development of the stablecoin ecosystem in Hong Kong. The project allows institutions to test their business models in a controlled environment and facilitate two-way communication with regulatory requirements. Hong Kong has been advancing the stablecoin regulatory framework since January 2022. The HKMA's efforts culminated in the release of a consultation summary and legislative proposals in July 2024, aiming to establish a risk-based and proportionate stablecoin regulatory system.

Although the inclusion of regulation does not mean that the Hong Kong government has officially approved the cryptocurrency stablecoin business, it is an important milestone, marking Hong Kong as the first region in the world to support banks or financial institutions to issue cryptocurrency stablecoins.

These companies will test their business models within the scope specified by the HKMA and maintain communication and coordination with the HKMA on how to comply with the proposed stablecoin regulatory system. These experiments and tests will provide valuable experience and data for Hong Kong’s cryptocurrency regulation, further promoting Hong Kong to become a leading global center for cryptocurrency and blockchain technology.