Core Viewpoint - The Hong Kong Monetary Authority (HKMA) emphasizes the need for a cautious and objective approach towards stablecoins, highlighting the importance of regulatory measures and the high standards for issuing licenses [1][4]. Summary by Sections Definition and Purpose of Stablecoins - Stablecoins are defined as virtual assets aimed at maintaining a relatively stable value against certain assets, typically currencies, such as the HK Dollar stablecoin (HKDR) which is pegged 1:1 to the HKD [3]. - They are not considered investment or speculative tools but rather payment instruments utilizing blockchain technology, lacking appreciation potential [3]. Regulatory Framework and Licensing - The HKMA plans to issue only a limited number of licenses initially, with a focus on applicants having real application scenarios [5][7]. - The first batch of sandbox participants included three issuers, and entry into the sandbox does not guarantee future licensing [6][8]. - The licensing process will be stringent, considering the risks associated with stablecoin issuance and the need for user protection [6][8]. Compliance and Market Considerations - From a compliance perspective, stablecoin issuers must demonstrate capabilities in asset management, price stability mechanisms, and risk control [8]. - Market sustainability for stablecoin issuers is influenced by user scale, application scenarios, and financial resources [8]. - Applicants must provide feasible business plans that address economic and financial pain points while ensuring compliance and operational sustainability [8].

Core Viewpoint - Hong Kong's "Stablecoin Regulation" will officially take effect on August 1, introducing a licensing system for stablecoin issuers pegged to fiat currencies, with high entry barriers expected to limit initial licenses to only a few issuers [1] Group 1: Regulatory Framework - The Hong Kong Monetary Authority (HKMA) aims to provide a balanced perspective on stablecoins, emphasizing that they are not investment or speculative tools but rather payment instruments utilizing blockchain technology [1] - The licensing process for stablecoin issuers is designed with high thresholds due to the associated risks and the need for user protection, with expectations that only a few licenses will be granted in the initial phase [1] - The HKMA launched a "stablecoin issuer sandbox" last year to understand the business models of institutions planning to issue fiat-backed stablecoins in Hong Kong, with several companies expressing interest in participating [1] Group 2: Market Dynamics - Various new payment tools are emerging alongside stablecoins, including Central Bank Digital Currencies (CBDCs), tokenized deposits from international banks, and cross-border fast payment systems, each with unique characteristics and varying levels of maturity [1] - The future development of these payment tools will largely depend on market forces, indicating a dynamic and evolving landscape for digital payment solutions [1]