Hong Kong Aims to Build Trust in Stablecoins, Differing from Singapore’s Payment-Focused Approach

February 19, 2025

By Joe Pan

Stablecoin Bill and FRS Roadmap Headline the Future Stablecoin Summit ahead of the Consensus Hong Kong Week

Hong Kong is positioning itself as a leading hub for stablecoin innovation by prioritizing trust and a comprehensive regulatory framework, a strategy that distinguishes it from other jurisdictions like Singapore. This was a key message that emerged from the Future Stablecoin Summit held on February 17th, organized by Hong Kong Digital Finance Association that brought together prominent government officials, regulators, and industry stakeholders, to discuss the future of digital assets in Hong Kong.

The fiat-reference stablecoin (FRS) focused summit, held ahead of the Consensus Hong Kong week, served as a platform to highlight Hong Kong’s commitment to fostering a robust and trustworthy stablecoin ecosystem. With the Legislative Council actively reviewing the stablecoin bill, the event provided timely insights into the region’s approach to digital asset regulation.

Keynote speakers, Under Secretary for Financial Services and the Treasury Joseph Chan, LegCo Member Duncan Chiu, addressed the summit, underlining the government’s commitment to supporting the growth of the digital asset industry. Chan’s presence signaled the importance the government places on stablecoins as a crucial element of Hong Kong’s financial future.

Joseph Chan noted that it is imperative that any regulations should enable better protection for investors’ assets, stating: ” to provide facilitation while at the same time, provide asset safety, and to minimize the financial crime is one of our key objectives.” He also combined and noted the aim to provide facilitation while at the same time providing asset safety, and to minimize the financial crime which are some of the key objectives.

Duncan Chiu emphasized Hong Kong’s unique perspective on digital assets. He noted that Hong Kong is taking “quite a little bit different approach comparing to Singapore”. While other jurisdictions may focus on governing the payment use of crypto products, Hong Kong views stablecoins as a “basket of new financial products.” This holistic approach considers not only how stablecoins are traded and used, but also how to license new financial products.

As the chairman of the committee reviewing the stablecoin bill, Duncan Chiu expressed his hope to “wrap it up ASAP,” highlighting the urgency and importance of establishing a clear regulatory framework. He acknowledged that members of the Legislative Council hold diverse views on the matter, and the ongoing discussions reflect the careful consideration being given to the legislation. The public has also closely followed these discussions, with live broadcasts and online updates providing transparency into the progress.

While many countries are still discussing stablecoin regulation, Duncan Chiu noted that “for a stablecoin, we’re not lacking behind.” He pointed out that even Japan, despite being among the first to issue directives on licensing, has yet to fully implement its regime. In contrast, Hong Kong is making steady progress, with the anticipation that the “sandbox can move to the official licenses” soon after the bill is finalized.

Addressing concerns about existing stablecoins that are widely traded but may not seek a license in Hong Kong, Duncan Chiu assured that the bill will address how these assets will be regulated and whether they will be permitted for trading in Hong Kong.

The government’s commitment extends to the planned federal assets custodian bill. This legislation aims to bring greater trust and confidence to the market, particularly for traditional financial institutions. Duncan Chiu stated that “traditional finance, we need traditional suffice to buy it, and custodian is one thing that is missing before.”

Other panel discussions at the summit further highlighted Hong Kong’s pragmatic approach to stablecoin regulation.

Ultimately, Hong Kong’s goal is to “provide trust into the system,” creating a healthy market where individuals with financial knowledge can contribute to its growth, as Duncan Chiu articulated. To achieve this, Hong Kong’s regulatory approach will focus on clear classifications of tokens, differentiating between various products and emphasizing stablecoins as a gateway connecting traditional finance and digital assets. “So we have to get it right in the beginning to actually provide this gateway. And then we can talk about other digital assets.”

Transcript compiled and edited by Xu Weilong and Wang Silu.

About the Author

Joe Pan is an editor at Blockwind News and an early adopter of blockchain technology. He has covered major crypto conferences globally since 2019 and frequently moderates Web3 events across Asia. Joe is part of the founding team of NFTMetta and Blockwind News.