Hong Kong's Stablecoin Ordinance Takes Effect August 1, 2025

The Hong Kong Monetary Authority (HKMA) has announced that the Stablecoin Ordinance will come into effect on August 1, 2025. This legislation establishes a licensing regime for fiat-referenced stablecoin issuers, aiming to enhance financial stability and foster innovation in the digital asset sector. Under the new framework, entities issuing stablecoins in Hong Kong or those pegged to the Hong Kong dollar must obtain a license from the HKMA. The ordinance outlines requirements for reserve asset management, redemption procedures, and risk controls to protect investors and the public. The HKMA has launched a consultation on the detailed regulatory requirements of the regime, including provisions related to anti-money laundering and counter-financing of terrorism. Interested institutions are encouraged to apply for a license before August 31, 2025, to receive feedback from the regulator. As of now, no licenses have been issued. The HKMA emphasizes the importance of responsible communication from market participants to avoid creating unrealistic expectations. The ordinance is expected to come into effect this year, providing a solid foundation for Hong Kong's virtual asset market and promoting the sustainable development of the industry.