June 10, 2025
By Anjali Kochhar
Hong Kong is set to officially implement its landmark Stablecoins Ordinance on August 1, 2025, marking a pivotal moment in the city’s ambition to become Asia’s digital asset powerhouse. This law will require all issuers of fiat-backed stablecoins to obtain a license from the Hong Kong Monetary Authority (HKMA), enforcing strict regulatory standards on reserve management, transparency, and investor protection.
Under the new framework, only licensed entities will be allowed to issue stablecoins that are pegged to fiat currencies like the US dollar or Hong Kong dollar for public use. Companies without a license will be restricted to offering these assets to professional investors only. Public promotion and advertising of stablecoins will also be limited to licensed players, aimed at protecting retail investors from misleading claims or under-collateralised projects.
The law enforces robust operational rules. Issuers must ensure that their stablecoins are fully backed by high-quality and segregated reserves such as cash, bank deposits, or government bonds. These reserves must match the same currency the stablecoin is pegged to. License holders will also be required to allow users to redeem their stablecoins at face value within one business day.
Additionally, the law outlines clear anti-money laundering protocols, governance structures, financial reporting rules, and auditing obligations. Issuers will need to meet a minimum paid-up capital requirement of 25 million Hong Kong dollars or one percent of their total issuance value, whichever is higher.
Compared with other global regulatory efforts, including Europe’s MiCA framework and ongoing debates in the United States, Hong Kong’s stablecoin law is considered one of the most comprehensive and strict. Yet, it offers clarity for crypto firms looking to build long-term trust with users and regulators alike.
This initiative builds upon Hong Kong’s broader push to lead in the virtual asset space. Since 2023, the city has launched regulated exchange licensing, piloted tokenized bonds, and introduced guidelines for custody and OTC trading. The stablecoin law is another step in building a trusted infrastructure for financial innovation.
Hong Kong officials, including Financial Secretary Christopher Hui and HKMA Chief Eddie Yue, have emphasised the principle of “same activity, same risks, same regulation,” signalling a balanced yet proactive approach toward Web3 and blockchain-based finance.
Stablecoins in Hong Kong are no longer operating in a gray area. They are becoming part of a formalised financial ecosystem built on accountability, transparency, and user trust. This signals not only a shift in how digital currencies are governed but also how they may eventually be integrated into everyday financial systems.
About the author
Anjali Kochhar covers cryptocurrency and blockchain stories in India as well as globally. Having been in the field of media and journalism for over four years now, she has developed a sharp news sense and works hard to present information that goes beyond the obvious. She is an avid reader and loves writing on a wide range of subjects.
