According to ChainCatcher, the Hong Kong Monetary Authority stated that it will adopt a risk-based regulatory approach, requiring fiat stablecoin issuers to demonstrate that their reserve asset investment policies and liquidity management policies are commensurate with the scale and complexity of their businesses, ensuring that they can fulfill redemption requirements both under normal circumstances and during periods of stress.
Regarding the types of reserve assets, the HKMA said that in general, high-quality and highly liquid reserve assets may include:
(a) coins and banknotes;
(2) deposits in licensed banks;
(iii) high credit quality securities representing claims on or guaranteed by governments, central banks or eligible international organizations;
(iv) overnight reverse repurchase agreements with very low counterparty risk using such securities as collateral; and
(V) Tokenized form of the above assets.
The issuer is ultimately responsible for the risk management of its reserve assets and should discuss its investment policy with the HKMA. As for other investment instruments, the HKMA will consider them on a case-by-case basis, taking into account factors such as the supply and liquidity of such assets and the ability to liquidate them within a short period of time.
