Lv Zhihong: The regulatory framework for stablecoins in Hong Kong is clear, issuers must meet multiple requirements such as capital, assets, and redemption.

Hong Kong Stablecoin Review and Adjudication Department and Web3 Development Working Group member Lyu Zhihong stated that Hong Kong has established a clear regulatory framework for virtual asset regulation, especially in the issuance and regulation of stablecoins. Currently, Hong Kong only allows the compliance issuance of "fiat-pegged stablecoins" backed by legal tender, and relevant institutions must strictly comply with regulatory requirements to ensure transparent issuance and asset security. Lyu Zhihong pointed out that regulatory agencies have set several key requirements for stablecoin issuers, including: Capital threshold: Applicants must have a minimum capital scale of at least HK $25 million to ensure they have enough financial strength to operate and deal with market risks effectively; Asset management requirements: Fiat funds collected by the issuer must be invested in high liquidity, low-risk assets to ensure that the value of stablecoins can be reliably supported; Redemption mechanism: Issuers must establish a clear and executable redemption arrangement so that holders can exchange fiat currency for stablecoins on a one-to-one basis within a short period of time to safeguard the rights of users. He added that stablecoin issuers also need to provide regulatory agencies with compliance proof through independent audits. For example, professional auditing firms such as Deloitte will issue audit reports according to regulatory requirements to verify whether the assets held by the issuer are indeed in the low-risk category and ensure that asset allocation is consistent with public disclosure, thus strengthening market confidence. Lyu Zhihong believes that Hong Kong's sound regulatory framework not only ensures the safety of investors but also lays a solid foundation for the development of stablecoins and the Web3 industry, attracting more international institutions to issue or use stablecoins in Hong Kong, and promoting the continuous development of the local virtual asset ecosystem.