Written by: Blockchain Headline
Recently, Chen Weimin, Deputy Chief Executive of the Hong Kong Monetary Authority (HKMA), stated at the HSBC Global Investment Summit that as a pioneer in the stablecoin licensing system, Hong Kong must proceed with caution. The HKMA has set a fairly high threshold for itself, preferring to start prudently – "learn to walk before you run."
He revealed that the authority spent about 6 months reviewing the first batch of 36 applications, and ultimately granted licenses to only two applicants, emphasizing the need to ensure that issuers have viable business use cases and comprehensive risk management capabilities.
Chen Weimin pointed out that Hong Kong just issued the first two stablecoin issuer licenses last week. As a pioneer, it is necessary to review each application one by one in accordance with legal standards to ensure that issuers meet the requirements. More importantly, it is hoped that licensees will have viable use cases, sustainable business development, and create value for businesses and individuals. At the same time, licensees must possess the ability to manage various risks, including maintaining the peg and stability mechanism, reserve management, private key security, anti-money laundering, and operational risks.
He stated that Hong Kong is currently experimenting with three paths simultaneously: central bank digital currency (CBDC), tokenized deposits, and stablecoins. The final form of future currency is not yet known, and it is hoped to ensure exploration on all three tracks. However, he believes that ultimate trust will still rest on sovereign central bank currency. On this basis, tokenized deposits serving as commercial bank money can be developed, and stablecoins backed by fiat currency can further facilitate adoption by the younger generation, but the underlying trust must still rely on sovereign currency.
Chen Weimin believes that regulations related to digital assets will become clearer. Regulatory bodies in different jurisdictions such as Europe, the Americas, and Asia are successively establishing frameworks, and a consensus is forming – digital assets must be regulated. He pointed out that the role of regulation involves not only cooperating with the private sector to promote industrial development but also identifying and intervening in risks at an early stage.
Chen Weimin introduced that the HKMA's Ensemble project brings together stakeholders including banks, regulators, infrastructure providers, and technology companies to jointly identify pain points, solutions, and risks in the financial system. The review of 20 use cases has been completed, with the private sector playing a very important role in shaping the regulatory framework and ecosystem.
Valerie Urbain, CEO of Euroclear, who also spoke at the event, stated that this year is a crucial year for the digital asset sector to move beyond the "concept" stage and enter larger-scale trials. The company is cooperating with the Banque de France to promote the tokenization of euro commercial paper. She emphasized that to move to the next stage and drive market transformation, cooperation must be strengthened to jointly promote the further development of tokenization and digital assets. However, she also pointed out that balancing market stability and promoting innovation is not easy, and this is a frequent concern for European regulators.
