Hong Kong Monetary Authority: Open to stablecoin reserve assets stored in other regions, but must comply with the T+1 redemption requirement on working days

Odaily Odaily News: The Hong Kong Monetary Authority stated that if the issuer of a stablecoin places its reserve assets in the custody of a licensed bank in Hong Kong, it can provide greater protection to users when its business is obstructed or goes bankrupt. The HKMA is open to licensed issuers' proposal to store their reserve assets in other regions and will consider it on a case-by-case basis, provided that the issuer can prove that there is a need to make such arrangements to ensure that additional risks are properly handled and that the rights and interests of users of fiat stablecoins are not affected. At the level of trust arrangements, the appointment of an independent trustee and a trust statement for reserve assets are both considered acceptable trust arrangements, but even if a custodian is appointed, it does not relieve the issuer of the obligation to properly manage and keep reserve assets and comply with regulatory requirements. In addition, the HKMA will require that under normal circumstances, the issuer shall fulfill its request within one business day of the day on which the redemption request is received. If it is expected that it will be difficult to fulfill the redemption request within one business day (such as an unexpected market pressure scenario), the approval of the Monetary Authority should be sought in advance. (Hong Kong Special Administrative Region Government News Release)