Technical Guide to Smart Contracts under Hong Kong Stablecoin Regulations

With Hong Kong issuing the "Stablecoin Ordinance" and related regulatory guidelines, strict compliance requirements have been imposed on stablecoin issuers. This article analyzes the impact of these requirements on smart contracts design and implementation from a technical perspective, providing practical guidance for issuers.

The main content includes:

1. Infrastructure Selection: It is recommended to prioritize mature public chains such as Ethereum, Arbitrum, etc. A comprehensive risk assessment of the underlying blockchain is required.

2. Contract Standards: Based on ERC-20, it must extend to implement functions for issuance, destruction, upgrading, pausing, and other Compliance requirements.

3. Access Control: A finely designed role-based access control system is required to assign different operation permissions to multi-signature wallets.

4. Issuance and Redemption Mechanism: Issuance must be matched with reserve assets, and redemption must be executed only after confirmation of fiat payment before token destruction.

5. Emergency Control: Implement functions such as pause and freeze, as key tools for event management.

6. Address Blacklist: Enforce blacklist restrictions at the smart contracts level, required to be used in conjunction with off-chain analysis tools.

7. Upgradability: Achieved through a proxy model, but upgrade operations require multi-signature and strict auditing.

8. Event Log: Emit detailed events for all important operations as a data source for off-chain systems.

9. Key management: Implement strict measures such as storing important private keys in hardware wallets and operating in air-gapped environments.

10. Deployment and Monitoring: Establish a strict pre-deployment checklist and implement ongoing on-chain activity monitoring.

11. Exit Plan: The contract must be designed to support a mechanism for orderly liquidation.

Overall, the regulatory requirements in Hong Kong have driven a safer and more transparent stablecoin technological architecture, but have also significantly increased the complexity of issuance and operation. Issuers need to seek a balance between compliance and user experience.