According to Odaily Planet Daily, the Hong Kong Financial Services and the Treasury Bureau stated that after the licensing system for virtual asset service providers came into effect in June last year, the Financial Services and the Treasury Bureau and the Hong Kong Monetary Authority consulted the public on the proposed regulatory system for Hong Kong stablecoin issuers at the end of last year, and will soon publish a consultation summary to prepare a draft bill for deliberation by the Legislative Council.

Given the important role of fiat stablecoins in the Web3 and virtual asset ecosystem, it is necessary for the government to establish a regulatory system for fiat stablecoin issuers. The main requirements include reserve management and stabilization mechanisms, redemption requirements, governance, knowledge and experience, etc.

To protect the users of fiat stablecoins, it is recommended that only licensed fiat stablecoin issuers, banks, licensed corporations, and licensed virtual asset trading platforms can sell fiat stablecoins in Hong Kong or promote related services to the Hong Kong public. For existing stablecoin issuers, the proposed regulatory regime will also have corresponding transitional arrangements.