On May 21, 2025, the Legislative Council of the Hong Kong Special Administrative Region passed the "Stablecoin Regulation Draft" (hereinafter referred to as the "Draft") with unanimous votes, marking Hong Kong's proactive stance in the global virtual asset regulatory race. According to Hong Kong legislator Wu Jiezhuang's disclosure on social media platform X, the implementation of this law will allow global institutions to apply for compliance fiat stablecoin issuance licenses from the Hong Kong Monetary Authority (HKMA) before the end of 2025.
Regulatory Framework Established: Hong Kong's Stablecoin Ambition
The core of the "Draft" is to establish a clear licensing system for fiat stablecoins. According to the latest guidelines from the HKMA, any institution issuing fiat stablecoins in Hong Kong, or issuing stablecoins claiming to be pegged to the value of the Hong Kong dollar both in Hong Kong and abroad, must obtain a license issued by the HKMA. Compliant issuers must meet strict regulatory requirements, including full fiat currency backing of reserve assets, independent custody of customer assets, a stable redemption mechanism, and a comprehensive compliance and risk management system. The HKMA also emphasizes that issuers must ensure that stablecoins are redeemable at face value instantly to protect investor interests.
Wu Jiezhuang stated that Hong Kong's stablecoins will be backed by fiat currency, aiming to ensure financial stability through strong regulation while unleashing the innovative potential of virtual assets. He posted on platform X: "Hong Kong welcomes global enterprises to apply for stablecoin issuance commission plans, demonstrating Hong Kong's open attitude towards the Web3 industry." It is reported that the HKMA launched a stablecoin issuer sandbox program in 2024, and by May 2025, five institutions had completed preliminary testing, showing market confidence in Hong Kong's regulatory framework.
Hong Kong Model: Balancing Innovation and Security
Hong Kong's stablecoin regulatory framework is unique on a global scale. Compared to the EU's MiCA regulations and the unclear regulatory policies in the United States, Hong Kong's "licensing system" balances flexibility and rigor. The "Draft" clearly limits the regulatory scope to fiat stablecoins, temporarily excluding complex types such as algorithmic stablecoins to reduce risks and simplify compliance processes. At the same time, Hong Kong also imposes regulations on stablecoins issued abroad but targeting the local market, with violators facing criminal penalties, highlighting the determination to protect the local market.
Notably, Hong Kong allows stablecoin issuers to release interest to holders, a rare innovative design globally. Industry insiders analyze that this move aims to enhance the market attractiveness of Hong Kong's stablecoins and encourage more institutions to participate in competition. Standard Chartered Bank has partnered with local Web3 company Anxi Group to plan the launch of a Hong Kong dollar stablecoin, targeting the cross-border payment and trade settlement market.
Future Direction: Stablecoins Empowering the Real Economy
In an interview with Deep Tide, Wu Jiezhuang stated that stablecoin issuance is just the starting point for Hong Kong's Web3 infrastructure. In the future, Hong Kong will focus on two major directions: first, expanding the application scenarios of stablecoins in areas such as physical retail and cross-border trade; second, enhancing the market competitiveness of stablecoins through mechanisms such as interest release.
In the field of cross-border trade, the low-cost and high-efficiency characteristics of stablecoins are particularly prominent. Compared to the traditional financial system, which often has settlement cycles of several days, stablecoins can achieve near real-time cross-border payments, significantly reducing transaction costs for small and medium-sized enterprises. According to platform X, a Hong Kong startup plans to launch a Hong Kong dollar-based stablecoin specifically designed for the Southeast Asian trade market, expected to enter the testing phase in early 2026. Wu Jiezhuang also revealed that Hong Kong is exploring the possibility of an offshore RMB stablecoin to further promote the internationalization of the RMB.
Social Media Buzz
The passage of the "Draft" has attracted widespread attention from the global crypto industry. There is a general consensus on X that Hong Kong's regulatory framework will attract a large number of international enterprises. Industry experts stated: "Hong Kong's licensing system is superior to the EU and the US in terms of clarity and operability, and may become a model for global stablecoin regulation." Meanwhile, Hong Kong's first-mover advantage is expected to propel it beyond Singapore and Dubai, becoming a leader in Asia's Web3 finance.
Li Dazhi, the Financial Technology Director of the HKMA, stated at a media conference on May 22 that Hong Kong's goal is not only to regulate stablecoins but also to lead the development of the Web3 ecosystem through policy innovation. He revealed that the HKMA will release detailed licensing application guidelines in the third quarter of 2025, ensuring that the industry has ample preparation time during the transition period.
Challenges and Opportunities Coexist
Despite the bright prospects, Hong Kong's path to stablecoins is not without challenges. Industry insiders point out that the widespread application of stablecoins needs to address issues such as privacy protection and technical security. Additionally, differences in the global regulatory environment may pose compliance challenges for cross-border stablecoins. However, with its mature financial system and open policy environment, Hong Kong is expected to stand out in the competition.
Wu Jiezhuang emphasized that Hong Kong will fully leverage the market advantage of China's 1.4 billion population to attract global Web3 enterprises. He stated: "Stablecoins are not only payment tools but also the cornerstone of the Web3 economy. Hong Kong is ready to welcome global innovators."
This article represents the author's personal views and does not reflect the position or views of this platform. This article is for informational sharing only and does not constitute any investment advice to anyone.
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