Hong Kong Financial Services and the Treasury Bureau Director Xu Zhengyu: You bear the risk of buying unregulated stablecoins

Deep Tide TechFlow news: On June 24, according to a press release from the Hong Kong Government, Chan Cheng-yu, Secretary for Financial Services and the Treasury, said in response in the Legislative Council today regarding stablecoin regulation that the potential risks that stablecoins may pose to the financial system have been fully considered. He has clearly required licensed stablecoin issuers to implement corresponding risk management measures, including investing reserve assets in eligible assets such as bank deposits and high-quality, highly liquid bonds, and keeping them in banks in Hong Kong. If necessary, the Hong Kong Monetary Authority may, depending on the circumstances, impose additional regulatory requirements on the licensees to ensure financial stability.

The Hong Kong Monetary Authority will work to promote the exploration of synergy and interconnection between compliant stablecoins and other new payment tools, creating value for the real economy and financial activities. In addition, only stablecoins purchased from designated regulated institutions will be covered and protected under the Stablecoin Ordinance. If non-regulated stablecoins are purchased through unregulated channels, the buyer must bear the risks themselves.