ChainCatcher news: According to Ming Pao, the Hong Kong Treasury Department and the Hong Kong Monetary Authority yesterday published a consultation summary on the legislative proposal for implementing a regulatory system for fiat currency stablecoin issuers in Hong Kong. The vast majority of respondents agreed that there is a need to introduce a regulatory system for fiat currency stablecoin issuers to properly manage potential monetary and financial stability risks and provide transparent and appropriate regulations.

The Treasury and the HKMA will finalize the legislative proposals to implement the regulatory system in response to the opinions and suggestions of the respondents and submit the draft bill to the Legislative Council as soon as possible; the HKMA is also processing the "sandbox" application of stablecoin issuers and will announce the list of participants in the near future. According to the consultation, most respondents support the total value of the reserve assets of the fiat stablecoin and the requirement to maintain full reserves at all times. Some respondents raised the potential difficulties of real-time reconciliation and the large number of processes required to replenish the reserve assets from time to time to ensure that the market value of the reserve assets is at least equal to the face value of the fiat stablecoin in circulation.

In addition, the consultation paper proposes that the issuer's minimum paid-up share capital should be at least 2% of the total amount of fiat stablecoins in circulation, or HK$25 million, whichever is higher. Some respondents believe that it is difficult to maintain sufficient capital in a timely manner based on the circulation of fiat stablecoins. The authorities will change the minimum paid-up share capital requirement to HK$25 million, or 1% of the circulation of its stablecoins, whichever is higher. The Monetary Authority still retains the flexibility and power to impose additional capital requirements when necessary.