At an event, Assistant Director of Financial Services and the Treasury, Chan Ho Lun, confirmed that the Hong Kong Government is working on drafting legislation to regulate entities issuing fiat-backed stablecoins. The goal is to submit related legislative proposals to the Legislative Council within this year. The government's stance on developing virtual assets and the Third Generation Internet is firm, with a belief that providing transparent, certain, and predictable regulatory conditions can effectively encourage financial innovation. Chan further explained that as virtual assets are increasingly becoming mainstream assets, there has been consensus in the market that a regulatory framework needs to be established for the issuers of fiat reference stablecoins (FRS). This framework is crucial for managing potential risks of monetary and financial stability and ensuring transparency and adequate safeguards. The proposed framework stipulates that FRS issuers must be registered entities in Hong Kong, operate from Hong Kong, and have senior management based locally. Additionally, it requires the issuers to hold 100% reserve assets, ensuring that each stablecoin in circulation is backed by equivalent reserves. These regulations aim to protect the rights of stablecoin users, promote market stability and healthy development.