Golden Finance reported that the Financial Services and the Treasury Bureau of Hong Kong stated that following the implementation of the licensing system for virtual asset service providers in June last year, the Treasury Bureau and the HKMA 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 the Legislative Council to review. The Treasury Bureau pointed out that it hopes that the regulatory system for issuers of fiat stablecoins that is appropriate and in line with international regulatory recommendations can provide adequate protection for users of fiat stablecoins and address the potential risks posed by fiat stablecoins to monetary and financial stability, so that the virtual asset ecosystem in Hong Kong can develop sustainably and responsibly. In view of the important role of fiat stablecoins in the Web3 and virtual asset ecosystems, and the increasingly close connection between the traditional financial system and the virtual asset market, the government needs to establish a regulatory system for issuers of fiat stablecoins, the main requirements of which include: reserve management and stabilization mechanisms, including the requirement that issuers must ensure that fiat stablecoins are fully backed by high-quality and highly liquid reserve assets; redemption requirements; and regulatory requirements such as governance, knowledge and experience. At the same time, in order to protect the users of fiat stablecoins, it is recommended that only the following institutions can sell fiat stablecoins in Hong Kong or actively promote related services to the Hong Kong public: licensed fiat stablecoin issuers; authorized institutions (i.e. banks); licensed corporations; and licensed virtual asset trading platforms. For existing stablecoin issuers, the proposed regulatory system will also have corresponding transitional arrangements.