Hong Kong’s central bank is inviting businesses keen on launching stablecoins backed by traditional currencies to participate in a special testing ground called a regulatory sandbox. To shape its plans and to regulate crypto linked to real currencies, the regulator intends to use the sandbox. With <a href="https://news.todayq.com/uk-set-to-introduce-new-rules-on-stablecoins-and-crypto-staking/" target="_blank" rel="noopener noreferrer nofollow">stablecoin</a> regulations, Hong Kong hopes to become a major player in the crypto industry.&nbsp; What is the purpose of the sandbox? 
Following a consultation on stablecoin regulation, the authorities launched the sandbox on Feb 29. The HKMA proposed a license requirement for all fiat-referenced stablecoin issuers in December, jointly with the Financial Services and Treasury Bureau.
“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,” chief executive of the <a href="https://news.todayq.com/hong-kongs-hkma-alerts-citizens-as-crypto-firms-pose-themselves-as-banks/" target="_blank" rel="noopener noreferrer nofollow">HKMA</a>, Eddie Yue said.
It was noted by the HKMA that sandbox applicants should come up with reasonable business plans and that their proposed operations under the sandbox arrangement would be limited. “Applicants should have genuine interest in developing a stablecoin issuance business in Hong Kong with a reasonable business plan, and their proposed operations under the sandbox arrangement will be conducted within a limited scope and in a risk-controllable manner,” it said.&nbsp; HKMA’s notice 
“We see there’s a very good demand. It is still a very, very small market, lots of room to grow for not only us but I think there are a lot of new stablecoins that will be coming on the market fairly soon,” the chief executive officer of First Digital and the issuer of FDUSD stablecoin, Vincent Chok said as per reports. “We know that there are a lot of people that are lining up to&nbsp;apply for this Hong Kong stablecoin licensing as well,” he added.
A Hong Kong dollar-denominated stablecoin is on its way later this year, and Chok said the firm plans to participate in the sandbox. In December, Hong Kong’s regulators solicited public opinion on its proposals for stablecoin regulation including requiring licenses for issuers.
“The HKMA wishes to leverage the sandbox arrangement to communicate supervisory expectations to parties interested in issuing fiat-referenced stablecoins in Hong Kong, as well as to obtain feedback from participants on the proposed regulatory requirements,” the notice continued.
Get Crypto Trading Signals from Real Crypto Analysts. Join our Waiting List at todayq.com

Hong Kong hopes to lead with the ‘sandbox’ launch

Todayq News

Other articles published on Mar 12, 2024

Crypto Innovations Heat Up As Dencun Upgrade Sparks ARB, OP, LDO, METIS Rally

Thailand Allows Spot Bitcoin ETF Exposure, But There’s a Catch

Solana Tensor Foundation Plans Release of TNSR Governance Token

Nibiru is about to launch its mainnet. What are its technical characteristics and security develo...

From $100 to $100k? Top 5 Altcoins Set to Explode

Bitcoin, Ethereum, and XRP price predictions for the coming week!

Join our free newsletter for daily crypto updates!