On Tuesday (12th), the Hong Kong Monetary Authority (HKMA) announced the launch of a sandbox for stablecoin issuers, inviting institutions interested in issuing fiat-backed stablecoins in Hong Kong to apply. Participating institutions’ proposed operations under the sandbox will be conducted within a limited scope and with manageable risks.
According to the press release, HKMA aims to communicate regulatory expectations and provide compliance guidance to “issuers of fiat-backed stablecoins who have a genuine intention and a reasonable plan to issue such stablecoins in Hong Kong” through the sandbox, in order to facilitate the implementation of subsequent regulatory regimes. Regulators will also collect feedback from participants on the proposed regulatory requirements to ensure that the regime aligns with regulatory objectives.
Vincent Chok, CEO of stablecoin issuer First Digital, stated in an interview with The Block:
Chok further mentioned that First Digital plans to participate in the regulatory sandbox as they are preparing to launch a stablecoin pegged to the Hong Kong dollar, hoping to introduce it later this year.
Further reading: “Stablecoins: Are They Truly Stable as a Medium of Exchange and Store of Value in Cryptocurrency Trading?”