The Hong Kong government welcomes today's (May 21) passage of the Stablecoin Bill by the Legislative Council, establishing a licensing framework for fiat-referenced stablecoin issuers. This initiative strengthens Hong Kong's regulatory framework for virtual asset activities while promoting financial innovation and maintaining monetary stability.
Key Provisions of the Stablecoin Ordinance
Licensing Requirement:
- Entities issuing fiat-referenced stablecoins in Hong Kong (or claiming HKD peg for stablecoins issued elsewhere) must obtain a license from the Monetary Authority.
- Strict reserve management rules apply, including:
✔ Client asset segregation
✔ Robust stabilization mechanisms
✔ Redemption guarantees at face value
- Compliance Standards:
Licensees must meet anti-money laundering (AML), counter-terrorist financing (CTF), risk management, disclosure, and audit requirements. The Monetary Authority will consult on detailed regulatory standards. Investor Protections:
- Retail investors may only purchase licensed fiat-referenced stablecoins.
- Advertising restrictions: Only licensed stablecoin promotions permitted (with 6-month compliance observation period).
👉 Learn how stablecoin regulation impacts digital asset investors
Government Perspectives
Secretary for Financial Services & the Treasury Christopher Hui:
"This same-activity-same-risk-same-regulation approach creates a robust framework aligned with international standards, reinforcing Hong Kong's position as a global financial hub while protecting user rights."
HKMA Chief Executive Eddie Yue:
"The risk-proportionate regulatory model supports responsible innovation in Hong Kong's digital asset ecosystem."
Implementation Timeline
- 2024 Enactment: Industry adaptation period provided
- Transition Arrangements: Phased licensing compliance
Next Steps for Virtual Asset Policy
The government will:
- Consult on OTC trading and custody services
- Release its second Policy Statement on Virtual Assets
FAQ: Hong Kong's Stablecoin Regulation
Q1: Who needs a stablecoin license?
A: Any issuer operating in Hong Kong or targeting HKD-pegged stablecoins globally.
Q2: Can retail investors buy all stablecoins?
A: No—only licensed fiat-referenced stablecoins with approved protections.
Q3: How does this compare to Singapore's regime?
A: Both adopt risk-based approaches, but Hong Kong specifically mandates redemption guarantees.
Q4: What's prohibited under advertising rules?
A: Unlicensed stablecoin promotions; violations may lead to penalties.
Q5: When will enforcement begin?
A: Full implementation expected by Q4 2024 with transition periods.
👉 Explore compliant digital asset strategies