According to Odaily Planet Daily, the Hong Kong Monetary Authority stated that stablecoin issuers can provide greater protection when their business is blocked or goes bankrupt by placing their reserve assets in the custody of licensed banks in Hong Kong. The HKMA is open to licensed issuers placing their reserve assets in other regions, but they must prove the need and ensure that risks are properly handled and that user rights are not affected.
In terms of trust arrangements, the appointment of an independent trustee and the trust declaration are considered acceptable, but the issuer still needs to properly manage the reserve assets and comply with regulatory requirements. The HKMA requires the issuer to fulfill the redemption request within one working day after receiving it. If it is expected that it will be difficult to fulfill, the issuer should seek the approval of the Monetary Authority in advance.
