The Hong Kong Monetary Authority (HKMA) has revealed the participants for its stablecoin issuer sandbox, which will be able to test plans to issue a stablecoin in Hong Kong.
Launched by HKMA in March 2024, the stablecoin issuer sandbox is part of the regulator’s efforts to facilitate responsible development of the stablecoin ecosystem in Hong Kong.
Through the sandbox, HKMA enables institutions with plans to issue stablecoin in Hong Kong to conduct testing on their operational plans, and facilitates two-way communication on the proposed regulatory requirements, to ensure a fit-for-purpose and risk-based regulatory regime.
Jingdong Coinlink Technology, RD InnoTech (RD Technologies), and a joint venture comprising Standard Chartered Bank, Animoca Brands, and Hong Kong Telecommunications, make up the first three participant parties for the sandbox.
These participants will conduct testing for various use cases of a proprietary Hong Kong Dollar stablecoin, (HKDR), such as digital asset trading and cross-border trade payments.
HKMA explained it selected participants based on which institutions it felt demonstrated a genuine interest in developing a stablecoin issuance business in Hong Kong with a reasonable business plan, during the assessment process.
In March, Eddie Yue, chief executive of the HKMA, commented: “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.”
Supporting stablecoin issuance
All proposed operations under the sandbox arrangement will be conducted in a risk-controllable manner and within a limited scope.
HKMA expects all sandbox participants to comply with the sandbox requirements. To begin with, participants will not handle the general public’s funds at the initial stage, and will not solicit funding from the public or offer any products associated with the sandbox.
Rita Liu, CEO of RD Technologies, said: “My team at RD Technologies is fully ready to communicate with the HKMA closely and demonstrate our superior technical capability, robust risk management and user-friendly stablecoin solutions that are in compliance with high regulatory standards. RD Technologies will continue to contribute to the development of the Web3 ecosystem in Hong Kong.”
Norman Chan, chairman of RD Technologies, also said: “RD Technologies remains committed to the mission of offering innovative solutions to help enrich the financial infrastructure that is essential in building Hong Kong as the Web3 hub of the world.”
HKMA also warned members of the public to stay vigilant to potential scams claiming to be related to the sandbox.
