Hong Kong Financial Secretary Paul Chan: Users bear all risks when purchasing unregulated stablecoins

According to a press release issued by the Hong Kong Government, today, Mr. Paul Chan, Secretary for Financial Services and the Treasury of Hong Kong, responded in the Legislative Council regarding stablecoin regulation, stating that the potential risks posed by stablecoins to the financial system have been thoroughly assessed. Licensed stablecoin issuers are explicitly required to implement appropriate risk management measures, including investing reserve assets in qualified assets such as bank deposits and high-quality, highly liquid bonds, and holding such assets at banks in Hong Kong. Where necessary, the Hong Kong Monetary Authority (HKMA) may impose additional regulatory requirements on licensees, depending on the circumstances, to safeguard financial stability. The HKMA will promote exploration of synergies and interoperability between compliant stablecoins and other new payment instruments to create value for the real economy and financial activities. Furthermore, only stablecoins regulated under the Stablecoin Ordinance—and purchased from designated, regulated institutions—are protected under the Ordinance. Purchasing unregulated stablecoins through unregulated channels entails bearing all associated risks personally.