Hong Kong Treasury Bureau announces three key points for stablecoin regulation

Hong Kong's Secretary for Financial Services and the Treasury, Christopher Hui, announced that anyone engaging in regulated stablecoin activities must obtain a license, including: conducting business of issuing fiat-backed stablecoins in Hong Kong, issuing Hong Kong dollar stablecoins, or actively promoting the issuance of their fiat-backed stablecoins to the Hong Kong public. The regulatory framework focuses on the following three aspects: (1) In terms of reserves, licensees must maintain a robust stabilization mechanism, ensuring that the reserve assets of the stablecoin are composed of high-quality and highly liquid assets, with a total value at all times at least equal to the face value of the fiat-backed stablecoins in circulation, and properly segregated and safeguarded; (2) To ensure proper protection for stablecoin holders, holders should have the right to redeem stablecoins from the issuer at face value, with redemption requests processed without unreasonable fees and within a reasonable timeframe; and (3) A series of requirements related to anti-money laundering, risk management, disclosure and auditing, and fit and proper criteria.