On August 1, 2025, the Hong Kong Stablecoin Ordinance officially came into effect, marking the implementation of the world's first comprehensive regulatory framework for fiat stablecoins. The implementation of the Ordinance formally establishes a licensing system for fiat stablecoin issuers in Hong Kong, further improving the regulatory framework for virtual asset activities in Hong Kong. This will strengthen financial stability while reserving space for the orderly development of financial innovation.
License Window Opens: The First Batch is Expected to be Landed in Early 2026
With the entry into force of the Ordinance, the Hong Kong Monetary Authority (hereinafter referred to as the “HKMA”) simultaneously launched the first round of stablecoin issuer license application window, which will be open until September 30, with a six-month transition period.
License Window Opens: The First Batch is Expected to be Landed in Early 2026
Used to handle compliance transition and other related matters for institutions conducting stablecoin issuance business in Hong Kong.
The HKMA encourages interested institutions to actively communicate their regulatory expectations before August 31; institutions that are well prepared and wish to be considered as early as possible must submit their applications before September 30. According to the plan, the first batch of stablecoin issuer licenses are expected to be issued in early 2026. It is worth noting that the HKMA has repeatedly publicly given the market pause, emphasizing that faster stablecoin development is not necessarily better, and cautioning against sacrificing risk control for speed, and urging the market to maintain rational expectations. This approach is also reflected in the design of the entry standards. Setting thresholds: Avoiding explosive growth The HKMA adheres to the principle of high prudence in issuing licenses and sets a relatively high threshold. The Chief Executive of the HKMA, Eddie Yue, has previously made it clear on several occasions that only a few licenses are expected to be approved in the initial stage. Even if an institution has entered the sandbox, it does not necessarily pass the review, nor is entry into the sandbox a prerequisite for future license applications. All applications are subject to rigorous individual assessment based on the quality of their materials. The July 29th Regulatory Technical Briefing further clarified that compliance, specificity, and sustainability are core licensing requirements. According to the regulatory requirements jointly issued by the HKMA and the Financial Services and the Treasury Bureau, institutions intending to issue Hong Kong dollar-pegged stablecoins in Hong Kong must, in addition to obtaining a statutory license, also meet traditional financial audit, reserve disclosure, transparency requirements and anti-money laundering obligations. Previously, Hong Kong Financial Services and the Treasury Bureau Director Paul Chan also pointed out that the general principles of supervision are similar to those of traditional financial assets. Relevant issuers must comply with regulations on reserve asset management and redemption, including proper segregation of customer assets. When stablecoin holders make a redemption request, it must be completed within one business day to meet user needs. HKMA Deputy Director Chen Weimin stated frankly that the review process prioritizes the completeness of supporting materials and the feasibility of the concept. For institutions lacking technical and risk control capabilities, a more practical approach is to collaborate with other stablecoin issuers to provide application scenarios, rather than pursuing sole issuance. Focusing on Payment Value: Drawing a Clear Line with Speculation The value of stablecoins lies in payments, not investment. In various public statements, the HKMA has consistently emphasized that the core attribute of stablecoins is a payment tool based on blockchain technology. Their value lies in their integration into the traditional financial system through regulation, not in their ability to become the subject of market speculation. Hong Pizheng, Chairman of the Hong Kong Financial Services Development Council, explicitly stated that stablecoins should be based on the long term, focusing on the profound transformation of payment infrastructure and the digitalization of asset markets, rather than becoming short-term speculative tools. Chen Weimin also reminded the public to be wary of concept bubbles and avoid excessive market excitement. Even if institutions are licensed, short-term profits remain uncertain. He called on investors to remain calm and make independent judgments when interpreting market information. Hong Kong Financial Secretary Paul Chan also pointed out in a signed article that the programmable nature of stablecoins offers the potential for payment automation and the restructuring of financial services processes, but their development should not be a "technology chase" or a "tool frenzy" but must be closely aligned with the needs of the real economy. Anchoring the Real Economy: From Cross-Border Settlement to Asset Tokenization With increasing regulatory clarity, the application of stablecoins is accelerating towards the real economy. The first batch of stablecoins will focus on cross-border trade settlement and Web3 scenario testing.
In an interview, Xu Zhengyu pointed out that in the Belt and Road infrastructure projects, stablecoins are expected to become an important digital tool to cope with local currency fluctuations and enhance regional economic resilience.
Paul Chan revealed that Hong Kong will continue to promote the tokenization of financial assets and plans to introduce token settlement mechanisms in areas such as green bonds, ETFs, and metal commodities, using stablecoins to build a bridge between on-chain assets and trading currencies. In an article published on August 4th, Eddie Yue noted that Hong Kong banks are experiencing rapid growth in digital asset businesses. Following the introduction of relevant regulatory guidelines, an increasing number of banks are exploring the sales of digital asset-related products and tokenized assets, as well as digital asset custody services. He believes that Hong Kong's growth momentum in the digital asset sector will continue, bringing new impetus to the development of Hong Kong's wealth management business.
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