PANews reported on July 19 that according to Sing Tao Daily Financial News, Hong Kong Monetary Authority Deputy Chief Executive Chen Weimin wrote in Huisi that the first three institutions participating in the "Sandbox" for stablecoin issuers proposed major application scenarios including payment, supply chain management and capital market use cases. In addition to the above application scenarios, the "Sandbox" participants also proposed other use cases, including Web3, games and virtual asset transactions. Participating institutions will test the stablecoin issuance process under different application scenarios, among which the HKMA pays special attention to business operation risks and technological risks. In the process, it will observe how participating institutions comply with the proposed regulatory requirements, such as how to ensure that reserve assets are high-quality and highly liquid, whether the redemption of stablecoins is smooth and can be completed within a reasonable time, whether the management of wallets and private keys is robust, and whether measures to protect stablecoin holders and anti-money laundering have been implemented.
In addition to complying with the requirements of the "Sandbox" and the laws of Hong Kong, if the application scenario involves cross-border payments, participating institutions must also ensure that the institution itself and overseas partners strictly abide by local applicable laws and regulations during the testing process. Depending on the participants' plans, the progress of the test and the degree of risk control, the HKMA may appropriately adjust the design scenarios and application scope of the "Sandbox" test. Chen Weimin said that these institutions must strictly abide by the requirements of the "Sandbox", such as not raising funds from the public or providing any investment products in the name of the "Sandbox", and not using public funds in the initial stage. If the "Sandbox" participants can use public funds to a limited extent due to the adjustment of the test scope, the HKMA will make a separate announcement. If any violations are found, the HKMA will immediately terminate the qualifications of the relevant participating institutions.