Hong Kong has passed the Stablecoins Bill, establishing a compulsory license regime for all issuers of fiat-backed stablecoins transacting within or offering tokens that are pinned to the Hong Kong dollar.
New Stablecoin Issuer Compliance Requirements
The new law requires the issuers to be licensed by the Hong Kong Monetary Authority (HKMA) and adhere to rigorous operating and capital requirements. These include:
Maintaining sufficient reserve assets
Enabling redemptions at par
- Segregating company and customer assets
- Compliance with anti-money laundering (AML) rules
- Compliance with regular audits and disclosure standards
- Maintenance of risk management policies
Global Regulatory Norms compliance
Christopher Hui, Secretary for Financial Services and the Treasury, pointed out that the law is consistent with the principle of “same activity, same risks, same regulation,” but also international standards.
“We think a robust and purpose-designed regulatory structure would provide favorable conditions to facilitate the healthy, responsible, and sustainable development of Hong Kong’s stablecoin and broader digital asset industry,” HKMA CEO Eddie Yue said.
Advertising Restrictions and Broader Crypto Oversight
It will be only the authorized stablecoin issuers who can advertise in Hong Kong, a measure to limit fraud and boost consumer confidence. The same regulatory frameworks for crypto trading platforms, OTC service providers, and custodians will be introduced by the government later this year.
Increased Local Interest in Crypto
The decision to change the law comes amid a growing demand for digital assets among Hong Kong people. In November 2024, a survey by Hong Kong University of Science and Technology revealed that 25% of respondents plan to hold cryptocurrencies—an improvement from 6% in September 2023. Sentiment on regulated platforms also improves despite market volatility.
Implementation Timeline
The Stablecoins Bill is to be implemented this year, a crucial step towards Hong Kong’s vision of becoming an elite hub for regulated digital finance.
