Hong Kong is making significant strides in the regulation of stablecoins, following the successful public listing of USDC issuer Circle in the United States. The Hong Kong Monetary Authority (HKMA) recently announced that it will implement the Stablecoin Ordinance on 1 August 2025, allowing fiat-pegged stablecoin issuers to apply for licenses in the territory.
The Stablecoin Ordinance, which was passed by the city’s Legislative Council in May 2025, aims to strengthen the digital asset regulations in Hong Kong. Eddie Yue, Chief Executive of the HKMA, emphasized that stablecoins are not investment vehicles but blockchain-based means of payment with no room for appreciation.
The regulator is currently conducting an industry consultation on the implementation guidelines and will begin accepting license applications once the Ordinance comes into force. However, Yue clarified that only a limited number of licenses will be granted initially, with a focus on viable use cases, prudent operation, and market trust.
Hong Kong’s approach to stablecoin regulation aligns with international standards, emphasizing risk management in areas such as reserve asset protection, price stability, redemption processes, and anti-money laundering. Companies seeking licenses must demonstrate strong governance, stable value maintenance, clear use cases, secure technology, and financial and operational strength.
In addition to stablecoin regulation, Hong Kong’s Securities and Futures Commission (SFC) has proposed allowing crypto derivatives trading for professional investors. This move is part of a broader effort to expand crypto-related services in the city, including authorizing crypto staking services and simplifying the licensing system for crypto trading platforms.
The introduction of the LEAP framework for market growth and tokenization of real-world assets further underscores Hong Kong’s commitment to fostering innovation in the digital asset space. These initiatives aim to enhance market integrity, investor protection, and regulatory compliance while promoting the adoption of emerging technologies.
As Hong Kong paves the way for stablecoin regulation and digital asset innovation, the global financial community will be closely monitoring the developments in the region. The successful implementation of the Stablecoin Ordinance and other regulatory initiatives could set a precedent for other jurisdictions seeking to navigate the evolving landscape of digital finance.
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References:
– https://www.financemagnates.com/cryptocurrency/amid-circles-ipo-success-in-the-us-hong-kong-gears-up-with-stablecoin-regulation/
– https://cointelegraph.com/news/stablecoin-licensing-tokenization-hong-kong-crypto-policy?utm_source=rss_feed&utm_medium=rss&utm_campaign=rss_partner_inbound
– https://www.americanbanker.com/payments/news/fiserv-exec-discusses-stablecoin-tech-for-credit-unions
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