The regulator invited applicants with a “genuine interest in developing a stablecoin issuance business” to join the sandbox.
The Hong Kong Monetary Authority (HKMA) started a regulatory sandbox to give potential stablecoin issuers an environment for developing and testing certain operations without penalties.
The sandbox provides regulatory leeway and aligns with Hong Kong’s plan to regulate fiat-backed stablecoins, which are cryptocurrencies pegged to the value of sovereign currencies like the U.S. or Hong Kong dollar, the regulator said on Tuesday.
“Applicants should have genuine interest in developing a stablecoin issuance business in Hong Kong with a reasonable business plan, and their proposed operations under the sandbox arrangement will be conducted within a limited scope and in a risk-controllable manner,” the HKMA notice said.
In December, the jurisdiction’s regulators started seeking public views on its regulatory proposals for stablecoins – including requiring issuers to be licensed in order to operate in Hong Kong.
“The HKMA wishes to leverage the sandbox arrangement to communicate supervisory expectations to parties interested in issuing fiat-referenced stablecoins in Hong Kong, as well as to obtain feedback from participants on the proposed regulatory requirements,” the notice said.