The Hong Kong Monetary Authority (HKMA) announced on Tuesday the launch of a “sandbox” for stablecoin issuers interested in issuing fiat-backed stablecoins in Hong Kong. Participating institutions will be able to propose their operations within the sandbox, with limited scope and controlled risks.
According to the press release, the HKMA aims to convey regulatory expectations and provide compliance guidance to “stablecoin issuers who have a genuine intention and a reasonable plan to issue fiat-backed stablecoins in Hong Kong” through the sandbox. This is intended to facilitate the implementation of subsequent regulatory frameworks, and the regulator will also gather feedback from participants on the proposed regulatory requirements to ensure that the system aligns with regulatory objectives.
Vincent Chok, CEO of First Digital, the issuer of the stablecoin FDUSD, stated in an interview with The Block that the company plans to participate in the regulatory sandbox as they are preparing to launch a stablecoin denominated in Hong Kong dollars, with the aim of launching later this year.
Further reading: “Stablecoins: Are They Truly Stable as a Medium of Exchange and Store of Value in Cryptocurrencies?”
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