Hong Kong Legislative Council Member #邱达根 : #稳定币 There are no speculation opportunities; the regulations reference the practices of the US, Japan, Singapore, and other equivalent industries in the EU

Interview content by Qiu Dagen:

Fiat-backed stablecoins refer to digital currencies that are 100% backed by cash or high-liquidity assets (such as short-term government bonds), in contrast to algorithmic or decentralized stablecoins.

#香港 As the first international financial center to incorporate such assets into a specific legal framework, it has a demonstration effect. The introduction of its #Stablecoin Regulation marks the beginning of the compliance year for stablecoins, especially in the Asian region.

Core Points Extracted

1. Why does Hong Kong need to regulate stablecoins?

In simple terms, Qiu Dagen stated that stablecoins are not meant for speculation but are important infrastructure for future international payments and cross-border transfers. Without regulation, significant issues can arise, such as the LUNA crash and controversies surrounding Tether's reserves. With regulation, banks and large institutions will feel more secure in their use. The Hong Kong government has introduced relevant laws to instill confidence and attract reliable enterprises to participate.

2. What are the characteristics of the regulatory design?

Referencing international best practices: absorbing regulatory experiences from the US MiCA, Japan, Singapore, etc.

Maintaining rigor: For example, reserve audits, licensing systems, and prohibiting speculative behaviors, with initial standards set high to emphasize risk control.

Encouraging innovation: Although the requirements are strict, the approach encourages the development of new scenarios and uses, rather than competing for market share with USDT and USDC.

3. How will the market change?

Initially, there are few participants, marking a testing and adjustment phase.

In the long term, as the demand for international payments grows and cross-border transactions become active, the demand for stablecoins will steadily rise.

With regulatory licenses, traditional financial institutions may also start to engage with or use stablecoins, promoting the integration of financial technology.

4. Possible impacts:

Sector Impact

OTC traders must be licensed and can no longer sell U freely, increasing the cost of illegal activities.

Stablecoin Issuance

The threshold for issuing coins is raised, making it nearly impossible for retail projects; large financial institutions or technology companies have a chance to enter the market.

Traditional Financial Institutions

They are expected to enter the stablecoin sector, promoting compliance #稳定币 in scenarios such as cross-border payments and e-commerce settlements.

DeFi Projects

The Hong Kong government encourages exploring new uses, such as supply chain settlements and public chain cross-border transfers, and does not support uses involving 'high volatility' or 'speculative trading'.