On May 21, 2025, Hong Kong’s legislature passed a landmark stablecoin bill, establishing a licensing framework for fiat-referenced stablecoin issuers. Under this new regime, any entity issuing stablecoins in Hong Kong or backed by Hong Kong dollars must obtain a license from the Hong Kong Monetary Authority (HKMA). The bill outlines requirements for reserve asset management, redemption procedures, and risk controls, aiming to safeguard public and investor interests. This move is part of Hong Kong’s strategy to enhance its competitiveness as a global hub for digital assets and develop its own stablecoin. Financial Secretary Christopher Hui emphasized the regulation’s adherence to a risk-based approach under the principle of “same activity, same risks, same regulation.” The ordinance, which supports the development of a robust virtual asset market, builds on the HKMA’s existing stablecoin issuer sandbox project, which includes three active participants. The regulation is expected to take effect later this year.
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