The Hong Kong Monetary Authority (HKMA) has detailed the next steps for implementing the Stablecoins Ordinance, which establishes a licensing regime for fiat-referenced stablecoin issuers in Hong Kong.
The Ordinance, passed by the Legislative Council in May 2025, will come into effect on 1 August 2025.
The new framework is designed to strengthen regulation of digital asset activities and mitigate associated financial and monetary risks.
The HKMA is currently conducting industry consultation on implementation guidelines and will begin accepting licence applications after the Ordinance takes effect.
Eddie Yue, Chief Executive of the HKMA, stated,
“A stablecoin is not an investment vehicle, but rather a blockchain-based means of payment. By nature, it has no room for appreciation.”
The regulation aligns with international standards and adopts the principle of “same activity, same risks, same regulation.”
It aims to ensure sound risk management, particularly in areas such as reserve asset safeguarding, price stabilisation, redemption mechanisms, and anti-money laundering.
Applicants will be subject to strict licensing criteria.
These include demonstrating sound governance, the ability to maintain stable value, viable use cases, technological security, and financial and operational sustainability.
Cross-border operators must also present compliance plans and obtain regulatory approvals in relevant jurisdictions.
“Only a handful of licenses will be granted initially,”
Yue said.
“Applicants must demonstrate viable use cases and the ability to operate in a prudent and sustainable manner, as well as command the trust of market participants.”
The HKMA is also contributing to international efforts in stablecoin regulation.
It is currently coordinating the Financial Stability Board’s (FSB) global review of the implementation of the Global Regulatory Framework for Crypto-Asset Activities, published in 2023.
As part of earlier engagement with the industry, the HKMA launched a “Stablecoin Issuer Sandbox” in 2024 to understand market practices and communicate regulatory expectations.
However, the authority clarified that sandbox participation is neither a prerequisite for, nor a guarantee of, licensing.
Hong Kong’s approach is intended to reflect local conditions while aligning with global regulatory developments.
The HKMA stated that it will continue working with international counterparts to support risk management and the orderly development of stablecoin markets.
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