Hong Kong Monetary Authority: Fiat stablecoin reserve assets include five categories: bank deposits, securities, coins and banknotes

The Hong Kong Monetary Authority said it would adopt a risk-based regulatory approach, requiring issuers of fiat stablecoins to demonstrate that their reserve asset investment policies and liquidity management policies are commensurate with the scale and complexity of their businesses, ensuring that they can meet redemption requirements both under normal circumstances and during periods of stress. Regarding the types of reserve assets, the HKMA said that in general, high-quality and highly liquid reserve assets may include: (i) coins and banknotes; (ii) deposits in licensed banks; (iii) high-credit quality securities representing claims on or guaranteed by governments, central banks or qualified international organizations; (iv) overnight reverse repurchase agreements with extremely low counterparty risk using such securities as collateral; and (v) tokenized forms of the above assets. Issuers must bear the ultimate responsibility for the risk management of reserve assets and should also discuss investment policies with the HKMA. As for other investment instruments, the HKMA will consider them on a case-by-case basis, including the supply and liquidity of such assets and the ability to liquidate such assets in a short period of time. (Hong Kong Special Administrative Region Government Press Release)