TechFlow, June 8 — According to Zhitong Caijing, Hong Kong's Financial Secretary Paul Chan said in a radio program yesterday that stablecoins are backed by fiat currencies and could eventually serve payment functions through technologies such as blockchain in the form of digital assets. Paul Chan stated that issuers of stablecoins will be regulated by the Hong Kong Monetary Authority (HKMA), with regulatory principles similar to those for traditional financial assets. Relevant issuers must comply with requirements regarding reserve asset management and redemption, including proper segregation of customer assets, and must complete redemptions within one business day upon request by stablecoin holders to meet user demands. He added that because stablecoins have payment functionality, when services or projects are carried out in "Belt and Road" regions where local currencies may experience high volatility or where financial systems are less developed, using local currencies for payments entails certain risks, and counterparties could instead use stablecoins for payment purposes.
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