Yesterday, the Treasury Bureau and the Hong Kong Monetary Authority jointly issued a public consultation document. Assistant Chief Executive (Monetary Management) of the Hong Kong Monetary Authority, Howard Lee, stated that this document includes a six-month transitional period. After the regulations take effect, existing issuers must submit license applications within the first three months. If no application is submitted within this period, their operations will be orderly terminated by the end of the fourth month.
The licensing criteria and conditions involve sound reserve management and stabilization mechanisms, as well as requirements for the redemption of stablecoins. Issuers are required to have full reserve support, and the reserve assets must be of high quality and high liquidity, such as Hong Kong government bonds. Additionally, the document suggests a minimum paid-up capital requirement of HK$25 million or 2% of the circulation value of the fiat currency stablecoin, whichever is higher.
Lee also mentioned that stablecoins do not necessarily have to be pegged to the Hong Kong dollar. However, existing stablecoin issuers in the market need to obtain a license in Hong Kong. Otherwise, platforms related to these stablecoins can only sell them to professional investors. The stablecoin licensing regime targets issuers, and restrictions will be imposed based on licensing activities and conditions if there are more than one stablecoin.