Hong Kong’s 2024 Budget Introduces ‘Regulatory Sandbox’ for Stablecoin Testing

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Hong Kong will launch a “regulatory sandbox” to test stablecoin issuance and business models, as outlined in the city’s 2024 budget plan.

Hong Kong’s Financial Secretary, Mr. Chan Mo-po, announced the implementation of a “regulatory sandbox” for issuing stablecoins as part of Budget 2024. This initiative is aimed at testing issuance processes, business models, mechanisms for investor protection and risk management systems for stablecoins in a controlled environment.

Creating a balanced regulatory framework

The announcement follows the government’s proposal last year to regulate stablecoin issuers, which was open to public consultation. The aim is to create a regulatory framework that balances financial stability with the need to encourage innovation. The Hong Kong Monetary Authority (HKMA) plans to launch the sandbox in the near term, allowing institutions interested in issuing stablecoins to test and communicate with regulators about future regulatory requirements.

Improving cybersecurity and investor protection

Mr. Chan emphasized the importance of cybersecurity and the protection of investors and users in the development of Web3.0. Adhering to the principle of “same business, same risk, same rules”, the Securities and Futures Commission (SFC) introduced a licensing regime for virtual asset trading platforms in June last year. The move is in line with international standards and offers protection for investors, positioning Hong Kong ahead of many major jurisdictions. In addition, the government is consulting on the regulation of OTC virtual asset services to strengthen investor and consumer protection.

A holistic approach to a robust virtual marketplace

The Government remains committed to promoting the stable and responsible development of Hong Kong’s virtual market. This will be achieved through timely information dissemination, comprehensive public education and enhanced law enforcement.


Hong Kong’s Budget 2024 reflects a proactive approach to integrating innovation with investor protection in the financial sector. The stablecoin regulatory sandbox is a forward-thinking initiative that positions the city as a leader in the evolving cryptocurrency and fintech landscape.

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