Hong Kong Legislative Council Stablecoin Ordinance Legal Advisor Faith: Stablecoin issuers need to bear regulatory obligations at the level of financial institutions

On July 30 (UTC+8), Fei Si, partner at King & Wood Mallesons' Hong Kong office, recently stated in an interview with CBN that regulators are aware that stablecoins can, to some extent, replace fiat currencies. The unique aspect of stablecoins is that their payment links bypass traditional financial institutions. From a regulatory perspective, stablecoin issuers must comply with the same level of compliance standards as financial institutions such as banks and securities firms, and the issued stablecoins must have one-to-one reserve assets to support them. "According to legislative requirements, stablecoin issuers have a legal obligation to ensure that investors can redeem them at any time, and their reserve assets must simultaneously meet the two characteristics of high liquidity and low risk," Fei Si emphasized in the interview. This regulatory approach reflects Hong Kong's balanced consideration between financial innovation and risk prevention. [MetaEra]