The Hong Kong Monetary Authority (HKMA) announced on Tuesday (12th) the launch of a sandbox for stablecoin issuers, inviting institutions interested in issuing fiat currency stablecoins in Hong Kong to apply. Participating institutions’ proposed operations under the sandbox will be conducted within a limited scope and manageable 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 currency stablecoins in Hong Kong” through the sandbox, in order to facilitate the implementation of subsequent regulatory regimes. Regulators will also collect participants’ opinions on proposed regulatory requirements to ensure that the system aligns with regulatory objectives.
Vincent Chok, CEO of stablecoin issuer First Digital, stated in an interview with The Block:
Chok also mentioned that First Digital plans to participate in the regulatory sandbox because the company is preparing to launch a stablecoin pegged to the Hong Kong dollar, with hopes of launching it later this year.
Further reading: “Stablecoins: Are They Really Stable as a Medium of Exchange and Store of Value in Cryptocurrency Trading?”