Hong Kong Introduces Stablecoin Licensing Framework for 2025

TLDR

• Stablecoin Ordinance effective August 1, 2025.
• Initial licenses limited to single digits in 2025.
• HKMA oversees compliance for fiat-referenced stablecoins.

Hong Kong has announced a significant regulatory development for the digital asset industry. The Stablecoin Ordinance will come into effect on August 1, 2025, introducing a licensing regime for fiat-referenced stablecoin (FRS) issuers. This is a part of broader efforts to enhance digital payments and fintech adoption in the Asia Pacific region.

This initiative, led by the Hong Kong Government, the Hong Kong Monetary Authority (HKMA), and the Financial Services and the Treasury Bureau, marks a strategic move towards establishing the region as a leader in digital payments. Major local and cross-border corporate entities, such as Chinese tech giants JD.com and Ant Group, have already shown significant interest by lobbying for yuan-pegged stablecoin offerings.

Limited Licenses and Regulatory Approach

Under the new framework, the issuance of stablecoin licenses will initially be limited to “single digits” in 2025, as confirmed by Christopher Hui, Secretary for Financial Services and the Treasury. This cautious yet proactive approach reflects Hong Kong’s commitment to maintaining oversight over digital asset markets while encouraging responsible innovation.

According to a government notice published on June 6, 2025, anyone issuing FRS in Hong Kong or using FRS pegged to Hong Kong dollars outside the territory must obtain a license from the HKMA. Official consultation documents are available, with the public comment period closing on June 30, 2025.

Key Industry Stakeholders

The HKMA and its partner agencies, traditionally the central regulators of Hong Kong’s financial system, are spearheading this initiative. These agencies have been involved in regulatory sandboxes for fintech, launching the digital yuan pilot, and managing licensing for cryptocurrency trading platforms since June 2023. This stablecoin regulation is an extension of their ongoing efforts to maintain a secure financial environment.

Chinese tech companies, such as JD.com and Ant Group, have been lobbying the central bank for permission to introduce yuan-pegged stablecoins. This reflects strong local and international corporate interest, suggesting that stablecoin licensing in Hong Kong may attract major industry players. HKMA Guidelines for Stablecoin Issuers provide further insights into the required compliance framework.

Implications for Cryptocurrency Market

The licensing regime will initially apply to fiat-referenced stablecoins, such as those pegged to the Hong Kong dollar (HKD) and offshore yuan. While Ethereum (ETH), Bitcoin (BTC), or most altcoins are not directly affected, stablecoins like Tether (USDT) and USD Coin (USDC) are expected to seek regulatory approval or adjust their operations to comply with these new local requirements.

Indirectly affected tokens include USDT, USDC, and other global stablecoins when used in Hong Kong. DeFi protocols or exchanges facilitating the trading of these assets for Hong Kong users may need to adapt as well. The ordinance restricts the offering of FRS to products issued by licensed issuers, impacting retail market access.

Regulatory Context and Comparisons

Hong Kong’s regulatory steps align with international trends, mirroring actions taken in Singapore and the European Union with their Payment Services Act and MiCA, respectively. These existing regulatory frameworks have led to increased institutional activity and higher confidence in fiat-referenced stablecoins.

Consequently, similar market movements may occur in Hong Kong as the stablecoin framework matures, potentially driving market activity towards regulated products. Although there are no public records of grants or funding specifically for this rollout, significant institutional involvement indicates a positive trajectory for compliance and adoption among industry players.