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In an announcement dated March 12, the Hong Kong Monetary Authority (HKMA) unveiled the stablecoin issuer sandbox.
The HKMA has inaugurated the stablecoin issuer sandbox alongside the consultation on a prospective legislative proposal. This proposal aims to lay the groundwork for a regulatory framework governing entities looking to issue stablecoins tied to fiat currencies in Hong Kong. The sandbox arrangement is strategically designed to disseminate supervisory standards and elicit valuable input from stakeholders regarding the proposed regulatory prerequisites.
Applicants interested in participating in the sandbox arrangement must exhibit a pragmatic business strategy and a genuine commitment to establishing a stablecoin issuing company within Hong Kong. Activities conducted under the sandbox framework will adhere to a risk-controlled and scope-restricted methodology. Specifics on the sandbox structure can be found in the Annex.
The HKMA will maintain and regularly update a list of participants engaged in the sandbox arrangement on its official website. Interested parties are encouraged to refer to this resource for the latest information on entities actively involved in the sandbox framework.
Eddie Yue, Chief Executive of the HKMA, emphasized the significance of the sandbox arrangement as a pivotal platform for fostering dialogue between the HKMA and industry stakeholders. This collaborative approach is expected to facilitate the development of well-suited, risk-based regulatory requirements essential for fostering the sustainable and responsible growth of the stablecoin issuance business.
According to Yue, "The sandbox arrangement serves as an effective channel for the HKMA and the industry to exchange views on the proposed regulatory regime, and will facilitate the formulation of fit-for-purpose and risk-based regulatory requirements, which is key to promoting the sustainable and responsible development of the stablecoin issuance business."
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