Hong Kong Secretary for Justice: Issuance of a Hong Kong Dollar-pegged Stablecoin in Hong Kong or Outside Hong Kong Requires Licensing

October 29th. Rimsky Lau, the Secretary for Justice of the Hong Kong Special Administrative Region Government, pointed out that virtual asset trading is becoming more and more active, and most trading is carried out through virtual asset trading platforms. Many investors will deposit their virtual assets on the exchange to obtain returns. In recent years, digital assets pegged to fiat currencies, which are called "stablecoins," have witnessed a rapid rise. Anyone who wishes to issue fiat currency stablecoins in Hong Kong or issue stablecoins claiming to be pegged to the value of the Hong Kong dollar in or outside Hong Kong must apply for a license from the Commissioner of Financial Management. Relevant parties must comply with regulations regarding reserve asset management, redemption, etc., including properly segregating customer assets and maintaining a sound stabilization mechanism.