The Hong Kong government welcomes the Legislative Council's passage of the Stablecoin Regulation Bill on May 21, 2025, marking a significant step in regulating virtual asset activities while fostering financial innovation.
Key Provisions of the Stablecoin Regulation Bill
Licensing Framework
- Mandatory Licensing: Entities issuing fiat-backed stablecoins in Hong Kong—or those issuing stablecoins pegged to HKD value outside Hong Kong—must obtain a license from the Monetary Authority.
Regulatory Compliance: Licensees must meet requirements including:
- Segregation of client assets
- Maintenance of robust stabilization mechanisms
- Redemption at face value under reasonable conditions
- Anti-money laundering (AML) and counter-terrorist financing (CTF) protocols
Investor Protection Measures
- Retail Access: Only licensed issuers may sell fiat-backed stablecoins to retail investors.
- Advertising Restrictions: Ads are permitted exclusively for licensed stablecoins, with a 6-month compliance grace period.
Government and Regulatory Perspectives
Financial Secretary Paul Chan:
"This regulation adheres to the principle of 'same activity, same risk, same regulation,' creating a robust framework that aligns with international standards while supporting Hong Kong’s role as a global financial hub."HKMA Chief Executive Eddie Yue:
"The risk-based approach balances innovation with stability, ensuring sustainable growth for Hong Kong’s digital asset ecosystem."
Implementation Timeline
- Expected 2025 enactment, with transitional arrangements for industry adaptation.
- Upcoming consultations on OTC virtual asset trading and custody services will follow.
FAQs About Hong Kong’s Stablecoin Regulations
Q1: Who needs to apply for a stablecoin license in Hong Kong?
A: Any entity issuing HKD-pegged stablecoins within or targeting the Hong Kong market must obtain a HKMA license.
Q2: Can retail investors buy all types of stablecoins?
A: No—only stablecoins issued by licensed entities are available to retail investors.
Q3: What are the penalties for unlicensed stablecoin issuance?
A: Unlicensed operations may face enforcement actions, including fines and cessation orders.
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