On 21 May, the Legislative Council of Hong Kong passed the stable currency bill. On the basis of the ordinance, Hong Kong will formally establish a licensor licensing regime for the issuance of legal tender notes, marking another milestone in the development of stable currency issuance in Hong Kong, China.
Up to now, the United States, the European Union, the United Kingdom, Japan, Singapore have carried out the stable currency as a means of payment attempt. The HKSAR Government, as the leading financial centre in Sunac Sunac, has been making steady progress since the announcement in December of new legislation to implement the 2023 system.
As one of the first 2024 participants in the “Stablecoin sandbox” announced by the HKMA in July, JD.com chain technology has also made a number of business-level reserves and accumulations to this end, liu Peng, a technology CEO at jd.com, spoke to reporters about the significance of the passage of the bill.
Milestone: virtual assets are formally brought into the legal supervision system
It is understood that stablecoin is a digital currency linked to certain stable assets, which is more suitable for day-to-day transactions and payments due to its low price volatility.
Guosen securities recently analyzed a research report entitled“Catching Fire, getting into a good state” and concluded that stable coins refer to cryptocurrencies whose value is anchored to various types of legal tender as assets on the blockchain, the advantage of stablecoin is that it can be deeply integrated with cryptocurrency projects at the level of blockchain infrastructure, and has very good network scalability, promote the stable currency in the traditional payment market application of exploration and in-depth.
Liu Peng agrees that Stablecoin is also essentially a cryptocurrency, using distributed ledger or blockchain technology and linked to fiat money or other reserve assets. But compared with traditional cryptocurrency, Stablecoin not only has the technical advantage of digital assets, but also makes up for the problems of other cryptocurrencies, such as large fluctuations, and can better realize the basic monetary attributes such as value scale, payment means, etc. , so it is emerging very quickly in the field of payments.
Commenting on the industry value of the bill, Liu Peng said that the passage of the bill on the third reading marks the formal incorporation of the virtual asset into the rule of law regulatory system, it is a significant milestone in the global cryptocurrency industry and provides a good institutional environment for the healthy and sustainable development of Hong Kong’s stable currency market.
Industry chain: more efficient, more economical, more secure payment infrastructure
According to Liu Peng, under the guidance of the JD.com Group’s overseas business development strategy, the 360buy chain technology team found that the issue of payment-based stable coins through the blockchain technology could not only solve its own cross-border settlement problems, can also effectively serve other enterprises and the real economy. In the context of the Hong Kong government’s strong support for the WEB3 industry, jd.com launched the first licensing application in Hong Kong. After about a year of hard work, has gained regulatory recognition and become a participant in the stablecoin sandbox in Hong Kong, and is now actively engaged in close communication and co-operation with the HKMA and other regulators in the region, promoting global compliance for JD.com’s stablecoin business.
Liu Peng also noted that the Jd.com stablecoin, which has not yet been released, is now in the second phase of sandbox testing and will be available to retailers and institutions for mobile and PC applications, the test scenarios include cross-border payments, investment transactions, retail payments, and so on. “Especially in the cross-border payment scenario, we have the ability to move very quickly, from days to minutes, even seconds,” he said, “The second is the low cost, the reduction in middlemen and transaction costs, the savings in cross-border payment costs, the advantages of a good experience and the ability to make payments year-round without interruption,” Liu Peng said. This makes it very suitable for the current application of international trade settlement.”
In addition, Liu Peng said that JD.com’s stable currency position was not limited to serving JD.com’s own ecology, but was committed to providing a more efficient, economical and secure payment infrastructure for businesses and individuals around the world, so expect more high-quality partners to join in, build a stable coin ecology, share the Web3 industry development opportunities.
Regulatory Framework: compliance security needs to rely on three-dimensional wind control system
As for the regulation system of stablecoin, Liu Peng stressed that compliance safety is the basis for market acceptance and recognition of jd.com Stablecoin and one of the advantages of stablecoin exhibition.
He explained that the regulation provides a specific regulatory framework, which mainly includes several aspects: first, strengthening reserve management, stressing the need for licensed issuers to establish a robust reserve mechanism, to ensure the high quality and high liquidity of the STABLECOIN reserve assets, and to ensure that the stablecoin can be redeemed at face value in a timely manner; and secondly, to attach importance to investor protection, and the holder of the STABLECOIN has the right to redeem the stablecoin at face value from the issuer, the third is comprehensive risk management and compliance with anti-money-laundering and risk management measures, disclosure obligations, audit requirements and adequacy standards for key personnel.
The King & Wood Mallesons also pointed out that the supervisory regime for the stable currency is similar to that for the storage value facilities (SVF) in various key aspects, and in line with the recent revision of the Basel Committee on Banking Supervision (BCBS) standard for the prudential regulation of stable currencies belonging to“Group 1B cryptographic assets”, such encrypted assets enjoy more capital-and regulatory-friendly requirements under the Basel Cryptoasset Standard. There are also similarities between Hong Kong’s stablecoin regulatory regime and the policy recommendations of the Financial Stability Board (FSB) on the global stablecoin arrangement.
Liu Peng also said 360buy chain would strictly comply with the Hong Kong and other regulatory regulations on regional currency stability, anti-money laundering and related regulations to ensure safety and compliance through a three-line defence mechanism, establish a three-dimensional risk control system including chain tracking, real-time transaction monitoring, full reserve asset custody, third-party audit, intelligent contract audit, etc. .