Hong Kong Monetary Authority announces stablecoin issuers participating in "sandbox": JD Coinlink/Circle Coin Innovation/Standard Chartered/Animoca Brands/Hong Kong Telecom
The Hong Kong Monetary Authority (HKMA) announced the list of participants in the "sandbox" for stablecoin issuers on July 18, 2024, and the Financial Services and the Treasury Bureau (FSTB) released a summary of the legislative proposals for the regulation of stablecoin issuers the day before.
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On July 18, 2024, the Hong Kong Monetary Authority (HKMA) officially announced the list of institutions participating in the stablecoin issuer sandbox program. The participating institutions include JINGDONG Coinlink Technology Hong Kong Limited, RD InnoTech Limited, Standard Chartered Bank Hong Kong Limited, Animoca Brands Limited, and Hong Kong Telecommunications HKT Limited. The HKMA stated that these institutions have demonstrated a genuine interest and reasonable plans to develop stablecoin businesses in Hong Kong, and have committed to operating within the confines of the sandbox in a controlled and manageable manner.
Background of the Sandbox ProgramThe HKMA stated that with the increasing popularity of virtual assets, the vast majority of public respondents agree on the need to introduce a regulatory regime for fiat-backed stablecoin issuers to properly manage potential currency and financial stability risks, and provide transparency and appropriate regulations. Respondents widely support the proposed regulatory requirements and implementation arrangements, and have provided optimization suggestions.
The sandbox program was launched in March 2024 and is one of the HKMA's key initiatives to promote the sustainable and responsible development of the stablecoin ecosystem in Hong Kong. The program allows institutions intending to issue stablecoins in Hong Kong to test their operational plans and engage in bilateral communication with the HKMA on proposed regulatory requirements to develop a purpose-driven and risk-based regulatory regime.
Participant Requirements and ConsiderationsParticipants in the sandbox must comply with relevant requirements and will not involve the use of public funds in the initial stages, nor will they raise funds from the public or offer related products under the name of the sandbox. Hong Kong citizens should remain vigilant against potential fraudulent activities claiming to be associated with the sandbox. If sandbox participants are allowed limited use of public funds due to adjustments in the testing scope, the HKMA will make separate announcements.
The HKMA stated that it will continue to handle inquiries and applications from sandbox participants, and will timely announce the list of new participants.
Financial Secretary Christopher Hui Ching-yu stated, "In addition to the existing regulatory framework for virtual asset trading platforms, establishing a licensing regime for fiat-backed stablecoin issuers will enhance Hong Kong's regulatory framework for virtual assets, align with international standards, and effectively mitigate the risks posed to financial stability by activities related to issuing fiat-backed stablecoins."
HKMA Chief Executive Eddie Yue Wai-man stated, "We sincerely thank the respondents for their valuable input and are encouraged by their widespread support for the proposed regulatory regime. We believe that a sound regulatory environment will help drive the sustainable and responsible development of Hong Kong's stablecoin ecosystem."