Fintech
HKMA Reveals Stablecoin Sandbox Participants, Ensures ‘Sustainable and Responsible Development’
THE Hong Kong Monetary Authority (HKMA) has revealed the participants of its stablecoin issuer sandbox, which will be able to test plans for issuing a stablecoin in Hong Kong.
Launched by HKMA in March 2024, the sandbox for stablecoin issuers is part of the regulator’s efforts to facilitate the responsible development of the stablecoin ecosystem in Hong Kong.
Through the sandbox, HKMA enables institutions intending to issue stablecoins in Hong Kong to conduct tests on their operational plans and facilitates two-way communication on proposed regulatory requirements, to ensure a risk-based and fit-for-purpose regulatory regime.
Jingdong Coinlink Technology, RD InnoTech (RD Technologies) and a joint venture consisting of Standard Chartered Bank, Animoca BrandsAND Hong Kong Telecommunicationsconstitute the first three groups participating in the sandbox.
These participants will conduct tests for various use cases of a proprietary Hong Kong dollar. stable currency(HKDR), such as digital asset trading and cross-border trade payments.
During the evaluation process, the HKMA explained that it selected participants based on institutions that it believed demonstrated a genuine interest in developing a stablecoin issuance business in Hong Kong with a reasonable business plan.
In March, Eddie YueHKMA Chief Executive, commented: “The sandbox agreement 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 are critical to promoting the sustainable and responsible development of the stablecoin issuance business.”
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All proposed transactions under the sandbox agreement will be conducted in a risk-controlled manner and within a limited scope.
HKMA expects all sandbox participants to comply with the requirements of the sandbox. To begin with, participants will not handle funds from the general public in the initial phase and will not solicit funding from the public or offer any products associated with the sandbox.
Rita LiuCEO of RD Technologies, said: “My team at RD Technologies is ready to communicate closely with the HKMA and demonstrate our superior technical capability, robust risk management and easy-to-use stablecoin solutions that comply with high regulatory standards. RD Technologies will continue to contribute to the development of the Web3 ecosystem in Hong Kong.”
Norman Chanpresident of the RD TechnologiesHe also stated, “RD Technologies remains committed to the mission of providing innovative solutions to help enrich the financial infrastructure that is essential to building Hong Kong as the world’s Web3 hub.”
The HKMA also urged the public to be alert to potential scams that allegedly involve the sandbox.