Regulatory Milestone: Hong Kong Advances Stablecoin Framework with New Licensing Bill

On Wednesday, Hong Kong’s legislative body approved a bill concerning stablecoins, which introduces a licensing framework for issuers of fiat-backed stablecoins in the region, thus clarifying regulations for future stablecoin providers.

According to a government statement, anyone issuing stablecoins in Hong Kong, or issuing stablecoins that are anchored to Hong Kong dollars, whether inside or outside the territory, is required to secure a license from the Hong Kong Monetary Authority (HKMA).

The new legislation outlines stipulations regarding the management of reserve assets, redemption processes, and risk management, all aimed at safeguarding the interests of the public and investors.

Hong Kong is intensifying its initiatives to create a regulatory framework to foster its own stablecoin, thus boosting the city’s status as a prominent player in the global digital asset space.

Stablecoins are a variety of cryptocurrency designed to maintain stable value, typically pegged to fiat currencies like the US dollar, and are frequently utilized by crypto traders for transferring funds among tokens.

“The Ordinance follows the principle of ‘same activity, same risks, same regulation’, emphasizing a risk-oriented approach to establish a strong regulatory framework,» stated Christopher Hui, the secretary for financial services and the treasury of the city.

This initiative sets a robust groundwork for the virtual asset market in Hong Kong, he noted.

Three entities have participated in a sandbox project for stablecoin issuers initiated by the HKMA last year.

The ordinance is anticipated to take effect within this year.

© Thomson Reuters 2025

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