Stablecoin application
1. Application for Hong Kong Fiat-pegged Stablecoin (FRS) issuance license
Fiat-pegged stablecoin: The licensing system for stablecoin issuers applies to the issuance of stablecoins whose "pegged assets are single or multiple fiat currencies (such as Hong Kong dollars, US dollars)".
Issued based on decentralized distributed ledger technology.
2. Requirements for Hong Kong stablecoin license
The application conditions for Hong Kong stablecoin license are mainly formulated based on the relevant requirements of the Hong Kong Treasury and the HKMA. Based on the actual application experience of Future Well License Compliance Limited, we summarize them as follows:
1. The issuer must be a company incorporated in Hong Kong or an overseas authorized institution that has obtained a banking license in Hong Kong.
2. There must be at least 3 key management personnel (such as CEO, CFO) resident in Hong Kong to ensure that daily operations are subject to local supervision.
3. Reserve assets must be deposited in a licensed bank in Hong Kong or a regulated independent trust account, strictly isolated from the issuer's own assets.
4. The composition, market value and liquidity of reserve assets must be disclosed to the public and regulators to ensure transparency.
5. The licensee must allow users to redeem stablecoins at face value within 1 working day, and no unreasonable conditions or fees shall be imposed.
6. Interest shall not be paid to users to prevent stablecoins from becoming deposit-like products.
7. A monitoring system that complies with the Hong Kong Anti-Money Laundering and Anti-Terrorism Financing Ordinance must be established.
8. The ability to resist cyber attacks and accept annual third-party audits must be possessed.
Requirements for applicant capital:
The minimum paid-in capital of HK$25 million or 1% of the face value of the circulating stablecoin (whichever is higher) must be met. The reserve assets must be equal to the face value of the circulating stablecoin and be "high-quality, highly liquid assets" (such as cash, bank deposits, government bonds or their tokenized forms).
III. How to apply for FRS license
Application process for stablecoin license:
1. Supplementary conditions: When key management personnel, funds and Hong Kong companies are in place, you can apply;
2. Submit materials: Submit materials related to the application conditions to the acceptance department and apply;
3. Review stage: The acceptance department will mainly review the company's financial situation, personnel qualifications, reputation and other aspects;
4. License issuance: Qualified units will obtain Hong Kong stablecoin licenses.
Future Well License Compliance Limited has many years of rich experience in licensing business and can handle the application or merger of relevant licenses on behalf of customers, saving customers' precious time and energy, and is your loyal partner on the road to success.
IV. Application fee for license
Our company provides one-stop service for your company and can help the company apply for a license in all aspects:
1. Preliminary preparation & sandbox testing (non-mandatory): Participate in the "Stablecoin Sandbox" of the Hong Kong Monetary Authority (HKMA) to test business models and risk management measures in a controlled environment and obtain regulatory feedback. The sandbox is not mandatory, but it helps to adjust compliance strategies in advance.
2. Submit materials: [Business plan] including the scale of stablecoin issuance, target market, application scenarios (such as payment, cross-border transfer), etc. [Reserve management plan] Details the type of reserve assets, custody arrangements and liquidity safeguards. [Corporate governance document] Board structure, risk management framework, anti-money laundering policy, etc.
3. HKMA review & license issuance: HKMA will assess the applicant's financial capabilities, technical security, reserve management mechanism and team professionalism.
4. Transitional period arrangement (6 months): After the licensing system takes effect, a 6-month transition period will be set to allow existing issuers to adjust their businesses to meet compliance requirements.
5. Continuous compliance and operation: [Regular report] Licensees are required to submit operational reports to HKMA, covering financial, risk management and user protection measures. [Dynamic adjustment] HKMA reserves the right to adjust regulatory requirements according to market changes (such as incorporating algorithmic stablecoins). [Compliance service] It is particularly important to choose a professional and dedicated compliance service provider to assist in license application and subsequent maintenance and compliance guidance. Here we recommend choosing Ming Kang International.
