HKMA Chief: The first batch of Stable Coins will focus on cross-border trade and Web3 applications

On June 25, according to Hexun.com, the Hong Kong Special Administrative Region Government published a notice in the Gazette on June 6, announcing that the “Stable Coin Ordinance” will officially come into effect on August 1, marking the establishment of the world’s first regulatory framework for long wick candle against Fiat Currency Stable Coin. Eddie Yue, Chief Executive of the Hong Kong Monetary Authority, recently wrote that considering Stable Coin is a relatively new product, the risks involved in the issuance business, user protection, market capacity, and long-term sustainability, there are quite high thresholds for licensing, and only a “small number of licenses” will be issued initially. Eddie Yue emphasized that participating in the Stable Coin issuance sandbox program launched by the Hong Kong Monetary Authority in 2024 is not a prerequisite for applying for a Stable Coin issuance license in the future; on the other hand, even for institutions already in the “sandbox,” it does not guarantee a license. The Monetary Authority will carefully consider all license applications based on consistent and stringent standards. Eddie Yue explicitly stated that applicants must present specific viable business plans and real-world use cases, with a focus on their reserve management capabilities, Compliance, and technical security. The initial Stable Coin will focus on cross-border trade and Web3.0 applications.