Hong Kong Stablecoin: Revolutionary Era of Digital Asset Regulation Begins

Key Points

1. The ordinance requires issuers of Hong Kong dollar-backed stablecoins operating in or from Hong Kong to obtain a license from the Hong Kong Monetary Authority (HKMA).

2. The regulation aims to mitigate risks and provide a secure framework for the stablecoin market, fostering trust and stability.

3. Key requirements for issuers include 1:1 backing with liquid assets, redemption at par, asset segregation, AML compliance, risk management, and disclosure standards.

4. The HKMA may expand the regulatory scope in the future, though the initial focus is on HKD-backed stablecoins.

5. The ordinance is expected to enhance market stability and solidify Hong Kong's position as a digital asset hub.