Hong Kong Monetary Authority: Consultation launched and "sandbox" arrangement introduced for proposed legislation on regulating stablecoin issuers.

BlockBeats news, on December 27th, the Financial Services and Treasury Bureau (FSTB) and the Hong Kong Monetary Authority (HKMA) jointly issued a public consultation paper to collect opinions on legislative proposals regarding the regulation of stablecoin issuers. The paper states that, due to the important role of stablecoins in the Web3 and virtual asset ecosystems, the connection between the traditional financial system and the virtual asset market is becoming increasingly close. The government believes that there is a need to establish a regulatory system for fiat-backed stablecoin issuers. As virtual assets become more popular, regulating fiat-backed stablecoin issuers through risk-based and flexible means can effectively manage potential currency and financial stability risks, and provide transparency and appropriate constraints. The HKMA will also launch a "sandbox" arrangement to convey regulatory expectations and provide compliance guidance to issuers who are interested and have specific plans to issue fiat-backed stablecoins in Hong Kong, while collecting their opinions on proposed regulatory requirements to promote the implementation of subsequent regulatory systems and ensure that the systems meet regulatory objectives. Details of the "sandbox" will be announced separately.