Hong Kong Secretary for Financial Services and the Treasury: The issuance of stablecoins must meet three major regulatory requirements, and the possibility of pegging to the Renminbi cannot be ruled out.

On June 20, at the Lujiazui Forum, the Secretary for Financial Services and the Treasury of the Hong Kong Special Administrative Region, Xu Zhengyu, stated in an interview that the use of stablecoins is aimed at returning to the essence of finance and effectively addressing pain points in economic activities, rather than merely pursuing technological applications or simply achieving interconnectedness. The regulation of stablecoin issuance is similar to the regulation of similar financial institutions, specifically reflected in:

First, the issuer itself needs to have capital; Second, after the issuer exchanges money with the stablecoin holders, the reserves must at any time be no less than the value of the currency backing the unredeemed stablecoins; Third, if the holder of the stablecoin wants to exchange it back to fiat with the issuer, it must be completed within one trading day, one business day, or one working day.

In addition, regarding whether stablecoins will accelerate the internationalization of the RMB due to being pegged to the RMB, Xu Zhengyu believes that from a regulatory perspective, this possibility cannot be ruled out. “The entire regulatory logic in Hong Kong is very clear; we follow what is written in the law, and the law allows for different fiat currencies to be used as the underlying assets for stablecoins.”

However, he also pointed out that “if we are to do it, we must take into account the exchange rate and monetary policy of the entire country. We already have some legal space, but the specific operation needs to consider the risks and overall pros and cons comprehensively.”