Core Viewpoint - The Hong Kong Monetary Authority (HKMA) emphasizes the need for a cautious approach to the growing interest in stablecoins, highlighting the importance of regulatory measures to ensure their safe and sustainable development [1][2]. Regulatory Framework - The Legislative Council of Hong Kong passed the "Stablecoin Ordinance" in May, establishing a licensing regime for stablecoin issuers pegged to fiat currencies, which will take effect on August 1 [2][5]. - The HKMA is currently consulting on specific guidelines for implementing the ordinance, aiming to enhance the regulatory framework for digital asset activities [2][5]. Licensing and Approval Process - The HKMA anticipates issuing only a limited number of licenses in the initial phase due to high entry barriers, requiring stablecoin issuers to demonstrate real-world application scenarios and sustainable business operations [5][6]. - Licensed stablecoin issuers must establish trust with market participants and ensure compliance with local and international regulations, including anti-money laundering measures [6][7]. Market Development and Risk Management - Stablecoins are viewed as payment tools rather than investment vehicles, with their future development largely dependent on market forces [3][4]. - The HKMA is actively involved in international regulatory discussions, including the Financial Stability Board's guidelines for stablecoin regulation, to address inherent risks and promote cross-border regulatory cooperation [4][7]. Local Adaptation and International Standards - The HKMA is developing a regulatory framework that aligns with local conditions while adhering to international standards, aiming to foster responsible and sustainable growth in the digital asset sector [7].