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Source: Beosin
On December 6, the Hong Kong government announced the highly anticipated draft of the Stable Currency Regulations.This legislation provides a detailed regulatory framework for the distribution institutions of Fiat-Referenced Stablecoins (FRS) to make Hong Kong a leader in the global virtual asset field.
This milestone measures have faced core issues such as financial stability risks, user protection needs, and regulatory clarity related to FRS.Through these measures, Hong Kong not only hopes to enhance the public’s trust in the stable currency ecosystem, but also strives to release the entire potential of virtual assets and its underlying blockchain technology in financial innovation and economic growth.
The “Draft Stable Coin Regulations” proposes the main regulatory requirements for stable currency issuance and operation:
1. Capital requirements
• It is necessary to hold a registered capital of at least 25 million Hong Kong dollars or approve foreign currency with equivalent value.The licensed institution should have sufficient financial resources to fulfill its financial obligations and meet other financial resources standards.
2. Supervision of reserve assets
• For each stablecoin, an independent reserve asset combination must be established to ensure that its market value is at least equal to the unsold stable currency value.
• Reserve asset portfolio shall be managed separately from other assets of the institution.
• Reserve assets should be selected as high -quality, high liquidity, and low -risk investment.
• Implement strict risk management and audit processes.
• Publicly reserve asset management, risk control and audit results to the public.
3. Stable currency redemption mechanism
• The licensed institution must provide unconditional stable currency redemption rights and shall not apply unreasonable restrictions.
• The exchange request must be processed in time and pays in the form of assets after deducting reasonable costs.
• In the case of non -debt of the licensed institution, the holders have the right to exchange stablecoins they hold in proportion.
4. Personnel qualification requirements
• The licensed institution must ensure that all the controller’s identity is clear and has the corresponding qualifications.
• Key positions such as Chief Executive Officer, Director, and Stable Coin Manager must be appointed by appropriate candidates.
• Senior managers should have the professional knowledge and experience required to perform their duties.
5. Risk management policy
• The licensed institutions must formulate a comprehensive risk management policy to ensure information security and prevent fraud, and have emergency response capabilities. At the same time, we must comply with the policy approved by the financial management commissioner.
6. Anti -money laundering and cracking down on terrorist fundraising
• The licensed institution must establish measures to prevent money laundering and funded terrorist activities related to stabilized coins, and ensure that the “Regulations on Anti -Money Laundering and Campaign of Territory” and related measures.
7. The purpose and stability of the issuance of stable currency
• The purpose, business model and operation arrangements of the licensed institution must be stable to avoid potential risks.
8. Business scope limit
• The licensed institution should focus on the stable currency business and obtain the approval of the financial management commissioner before carrying out other businesses. At the same time, it is necessary to ensure that other business activities will not constitute a major risk on the stablecoin business.
9. Information disclosure requirements
• The licensed institution must publish a white paper to provide comprehensive and transparent information about stable currency, and disclose information such as complaint processing and compensation mechanisms, stable currency management and risk assessment.
10. Complaint handling mechanism
• The licensed institution must establish and implement an effective complaint handling and compensation mechanism to ensure that the coin holders can easily and efficiently solve their problems.
11. Policies without interest
• The licensed institution shall not pay interest on stable currency, nor allows any form of interest payment.
12. Orderly reduced scale and recovery plan
• We must establish an orderly reduction mechanism to ensure that the exchange of stablecoins can be carried out in an orderly manner.The licensed agency shall formulate an appropriate emergency plan.
In order to effectively implement the system, the “Draft Regulations” also recommends that the necessary supervision, investigation and law enforcement power for financial management commissioners is recommended.
Xu Zhengyu, director of the Financial Affairs and Treasury Bureau, said,This legislative proposal is critical to performing Hong Kong as a member of the financial stability council.Adhering to the principles of “the same activity, the same risk, and the same supervision”, the legislative suggests that the risk -based is based and is committed to creating a stable regulatory environment, which is also consistent with Hong Kong’s regulatory policy of virtual assets in Hong Kong.
Yu Weiwen, president of the Financial Administration, said that legislation suggested that after a wide range of inquiry and fully considering the industry’s opinions when determining the details of the regulatory system. It is believed that the stable regulatory environment can help promote the sustainable and responsible development of the stable currency ecosystem in Hong Kong.
This comprehensive regulatory framework aims to ensure the stability, security and transparency of the stable currency ecosystem, while protecting the rights and interests of the relevant interests.The “Draft of the Regulations” is planned to conduct the first review in the Legislative Council on December 18. The future implementation will be an important step to promote the further development of the virtual asset ecosystem in Hong Kong.
Through this legislation, Hong Kong demonstrated a firm determination to coexist in compliance and innovation in the global virtual assets.
