The draft regulations for the supervision of stablecoin issuers have been submitted to the Hong Kong Legislative Council for review this week. Legislative Council member and chairman of the Web3 and Virtual Assets Development Subcommittee, Wu Jiezhuang, pointed out that stablecoins are part of the infrastructure for virtual assets. In addition to being used for investment, they can also facilitate cross-border payments and are an important tool for citizens to engage with virtual assets. However, the current regulatory direction suggests that issuers should entrust their reserve assets to Hong Kong banks for custody, which may not comply with the local regulations of some coin merchants. Efforts will be intensified to communicate with the government and the industry to seek a compromise solution, such as formulating contracts or bills for mutual recognition between the two regions, while also not requiring that the assets exist in Hong Kong.