Hong Kong Stablecoin Issuance Smart Contracts Implementation Guide

Part One Infrastructure and Compliance Strategy

1. Choice of underlying distributed ledger

It is recommended to prioritize mature public chains such as Ethereum and Arbitrum. If considering other types of ledgers, a strict assessment must be conducted and a detailed risk assessment report must be formed. The evaluation should include the ability to withstand 51% attacks, consensus algorithms, code defect risks, etc.

2. Core Token Standards and Regulatory Function Expansion

Using ERC-20 as the base standard and integrating the following functional modules:

• Pausable: Global pause and resume functionality
• Mintable: Controlled issuance feature
• Burnable: issuance function
• Freezable: freeze specific account functionality
• Whitelist: Whitelist function
• Blacklist: blacklist feature
• AccessControl: Role-based access management

3. Main compliance model: choice of blacklist and whitelist

It is recommended to adopt a blacklist model, combined with powerful off-chain analysis tools. The system is designed to be upgradeable, so it can switch to a whitelist model in the future.

Part Two Implementation of Smart Contracts

1. Design a refined access control system

Define multiple clear roles, such as MINTER_ROLE, BURNER_ROLE, etc., controlled by a multi-signature wallet. Strictly isolate responsibilities to avoid single points of failure.

2. Issuance ( coin ) mechanism

Minting permissions are a key control point. On-chain minting functions can only be called by trusted entities verified off-chain. The operational process includes off-chain KYC/CDD, fund reception, internal verification, and on-chain execution.

3. Redemption ( destruction ) mechanism

Adopt a two-step redemption process: users first transfer the tokens to a designated address, and the issuer executes the burn after confirming the fiat payment. This provides a safer operational process for both parties.

4. Implement emergency control: suspend and freeze

Implement global pause functionality and account-level freeze functionality, controlled respectively by PAUSER_ROLE and FREEZER_ROLE.

5. Address filtering and blacklist mechanism

Enforce a blacklist mechanism on-chain to prohibit blacklist addresses from transferring/receiving tokens. Combine off-chain analytical tools to update the blacklist in real-time.

6. The Upgradability of Smart Contracts

Implement upgradeability using the ERC-1967 proxy model. The upgrade function can only be called by a multi-signature wallet with UPGRADER_ROLE and must complete a strict change management process.

7. On-chain event logs for analysis and reporting

Define and emit custom events for all important state changes, such as token issuance/destroying, contract pausing/resuming, etc.

Part Three: Operational Security and Lifecycle Management

1. Secure Key Management Architecture

Key generation in a gap environment is conducted using a multi-signature wallet to control management roles, with critical private keys stored in HSM. Establish a detailed key lifecycle management process.

2. Complete deployment process and runtime monitoring

Conduct comprehensive testing, independent audits, code freezing, and other steps before deployment. Implement on-chain activity monitoring and threat intelligence monitoring after deployment.

3. Provide technical support for business continuity and exit planning.

Design a contract "retirement" mechanism, including the function of freezing the contract status. Develop a detailed business exit plan covering various termination scenarios.