Hong Kong and the US stablecoin regulatory draft passed: sharing an analysis of reserve requirements, risk control, and innovative pathways.

As the key to the integration of blockchain and finance, the regulatory framework of stablecoins has attracted global attention. Hong Kong and the U.S. have their own regulatory approaches to asset reserves, risk control and innovation. Based on recent Space discussions, this article summarizes the sharing of Rita Liu, CEO of Yuanbi Technology, Paolo Chen, ecological partner of Shengli Securities, Lin Junjie, Web3 partner of Huaying Securities, Shao Jiaio, partner of Mankiw Law Firm, and Wu Chen, co-founder of EX.IO, to analyze the regulatory differences and future trends between the two places one by one.

Rita Liu (CEO of YuanCoin Technology): The foresight and flexibility of Hong Kong regulation

Rita Liu pointed out that Hong Kong's "Fiat Currency Stablecoin Supervision Act" has entered the licensing stage and is at the forefront of the world. Hong Kong has three major characteristics in terms of reserve assets: first, it is not limited to the anchor currency, allowing multi-currency pegs such as US dollar, euro and offshore renminbi, which is different from Singapore's single currency restriction; Second, reserve assets need to be low-risk and high-liquidity assets, including bank deposits, bonds issued by regulators and their tokenized forms (such as tokenized U.S. bonds); The third is to explicitly accept real-world asset tokenization (RWA), reflecting the support for blockchain innovation. In addition, Hong Kong has set a capital threshold of HK$25 million (exempted for banking institutions), requiring issuers to appoint local CEOs, substitute CEOs and stablecoin managers, all of whom are permanent residents of Hong Kong, to ensure localized supervision. Rita stressed that Hong Kong prohibits algorithmic stablecoins, focuses on fiat currency stablecoins as a payment tool, and prohibits issuers from paying interest to currency holders, with clear regulatory objectives. She is optimistic that Hong Kong will promote financial integration through RWA and multi-currency issuance, and expects stablecoins to reshape the cross-border settlement system in the "third generation of payments", combining public chains (such as Ethereum) and cross-chain technology to achieve efficient peer-to-peer payments.

Paolo Chen (Partner of Victory Securities Ecosystem): RWA Innovation and Algorithmic Stablecoin Risks

Paolo Chen said that as the most active brokerage in the field of virtual assets in Hong Kong, Victory Securities ranks first in Hong Kong in terms of trading volume, and is incubating a compliant licensed exchange platform. In the field of stablecoins and RWA, Shengli Securities, Xunying Group and Ant International Cooperation launched an RWA project with new energy battery swap as the underlying asset to explore on-chain applications. He believes that Hong Kong's regulatory framework shows openness to the Web3 ecosystem by supporting RWA and multi-currency pegs, while the introduction of the stablecoin bill in the United States is more out of strategic considerations to maintain the status of the US dollar. For algorithmic stablecoins, Paolo took the "death spiral" of Luna/UST as an example, pointing out that they lack sufficient liquidity and anti-risk collateral assets, which are prone to systemic risk spillover. As a result, mainstream jurisdictions such as Hong Kong prohibit algorithmic stablecoins and prioritize financial stability.

Lin Junjie (Web3 Partner at Huaying Securities): The practice of tokenized assets and the expansion of payment scenarios

Lin Junjie shared that Huaying Securities, as one of the earliest institutions in Hong Kong to deploy virtual assets, jointly issued Hong Kong's first tokenized money market fund product with ChinaAMC Fund and Standard Chartered Bank, which is regarded as an important attempt in the development of local stablecoins. The product is planned to be applied to scenarios such as repo transactions, paving the way for the application of stablecoins in the field of payments and financial instruments. He believes that Hong Kong, with its advantages in the linked exchange rate system and financial reserves, is suitable for issuing multi-currency stablecoins, especially in scenarios such as cross-border trade. In contrast, U.S. state-level regulation is fragmented, limiting the cross-border expansion of stablecoins. Lin Junjie pointed out that although stablecoins may weaken the payment function of traditional banks, core businesses such as lending are still difficult to be replaced, and it is necessary to explore how to incorporate crypto-asset-backed stablecoins into supervision in the future.

Shao Jia Dian (Partner at Mankun Law Firm): The refinement of Hong Kong regulation and the global ban on algorithmic stablecoins

Mr. Shaw added that Hong Kong's stablecoin regulations are more detailed in terms of capital requirements, staffing and retail sales regulations, and are more operable than the bill in the United States, which is still in the draft stage. For example, Hong Kong requires issuers to have a local management team, and only licensed issuers can sell stablecoins or advertise to retail users. Regarding algorithmic stablecoins, Mr. Shao pointed out that major jurisdictions including Hong Kong, the European Union, Singapore, Japan, and the United States generally prohibit them because the Luna/UST incident exposes the risk of a "death spiral" in market volatility, and it is difficult to meet the regulatory requirements of high liquidity and low risk. For interest-bearing stablecoins, Hong Kong excludes them from the framework of fiat currency stablecoins and is subject to banking law or securities law regulation, reflecting regulatory clarity.

Wu Chen (Co-founder and CEO of EX.IO): Concerns about fragmented US regulation and systemic risk.

According to Wu Chen's analysis, the proposed "Genius Stablecoin Act" in the United States sets a threshold of $10 billion, which is divided into two levels of regulation, which may open the way for technology giants (such as Twitter and Google) to issue stablecoins. If passed, smaller issuers would face less regulation, but the issuance of coins by large corporations could trigger a run on stocks similar to the 2008 financial crisis. He pointed out that the fragmentation of U.S. regulation (coexistence of federal and state) has led to arbitrage space, which limits the expansion of stablecoins in cross-border scenarios. Combined with the role of Hong Kong's licensed virtual asset trading platform (VATP), Wu Chen believes that regulatory inconsistencies will hinder the large-scale development of technology companies' stablecoins, and it will be difficult to replace traditional banking functions in the short term.

Rita Liu (CEO of Yuan Coin Technology) added: Third-generation payment and multi-chain ecosystem

Rita Liu further proposed that the stablecoin market should "bloom" to meet the huge demand for cross-border payments. She divides the payment system into three generations: the first generation relies on SWIFT and intermediary banks; The second generation is accelerated by Fintech through the capital pool; The third generation focuses on stablecoins, central bank digital currencies and tokenized deposits to build an efficient cross-border payment network. The Hong Kong Ordinance does not restrict the currency of stablecoins, and Hong Kong dollars, US dollars, and offshore renminbi can be issued in compliance with regulations. Rita revealed that Yuanbi Technology gave priority to Ethereum to issue stablecoins, and was optimistic about the application of multi-chain and cross-chain architecture in payment scenarios. She stressed that regulation will tend to be localized, stablecoin projects serving in Hong Kong will need to obtain local licenses, and RWA on-chain will promote the migration of funds to the blockchain.

Conclusion

Hong Kong and the U.S. have their own priorities in stablecoin regulation: Hong Kong attracts the Web3 ecosystem with flexible currency options, RWA support, and high barriers to entry; The U.S. relies on the U.S. dollar and strict disclosure to maintain market dominance. In terms of risk control, Hong Kong attaches great importance to pre-emptive prevention, while the United States relies on post-event accountability. In terms of innovation, Hong Kong promotes the integration of RWA and finance, while the United States consolidates the market with technological iteration. In the future, stablecoins will play a greater role in cross-border payment, trade and other scenarios, and the integration and competition of regulatory paths between the two places will promote the digital transformation of global finance.