Hong Kong regulates stablecoins! The "Stablecoin Bill" has been passed, and the next step is to regulate OTC and custodial services.

On May 21, 2025, the Hong Kong Legislative Council officially passed the "Stablecoin Bill", marking an important step for Hong Kong's virtual asset market. The new regulations aim to establish a licensing system for fiat stablecoin issuers, strengthen the regulatory framework, and balance financial stability with technological innovation. The government and regulatory bodies welcomed this move, emphasizing that it helps Hong Kong maintain its leading position in the global virtual asset race.

Stablecoins are subject to regulation, and issuers must apply for a license.

According to the newly passed Ordinance, any enterprise or individual issuing fiat stablecoins in Hong Kong, or issuing stablecoins anchored to Hong Kong dollars locally or overseas, is required to apply to the Hong Kong Monetary Authority for licensing. The regime sets strict regulations on asset reserves, redemption arrangements, risk management, information disclosure and anti-money laundering, with the aim of ensuring the sound operation of the market and protecting the interests of stablecoin holders.

The issuer must handle users' redemption requests at face value under reasonable conditions and implement an asset isolation mechanism. At the same time, the licensing system requires applicants to have a sound governance structure and audit arrangements to ensure their operations are transparent and trustworthy.

Strengthen market confidence, only licensed stablecoins can be sold at retail.

The new regime stipulates that only certified licensed stablecoins can be sold to retail investors, and advertising regulations have been tightened. To avoid scams, only ads related to licensed stablecoin offerings are allowed to appear on the marketplace. Even during the six-month transition period, the ads are still required to comply with the law.

This arrangement not only protects investors but also enhances public confidence in virtual assets. The government reminds citizens to remain vigilant when receiving information or advertisements related to stablecoins to avoid falling into traps.

Government: Promote innovation and regulation in parallel, establish international confidence

The Secretary for Financial Services and the Treasury, Christopher Hui, stated that the new regulations are designed based on the principle of "same activities, same risks, same regulations," ensuring that the regulatory framework can address various virtual asset activities. He pointed out: "This regulation not only complies with international standards but also solidifies Hong Kong's position as an international financial center, laying a solid foundation for the local virtual asset industry."

The President of the Monetary Authority, Yu Weiwen, also stated that the "Stablecoin Regulation" establishes a "risk-based, pragmatic, and flexible" system, providing the conditions for sustainable development of Hong Kong's digital asset ecosystem.

Regulations to take effect within the year, with a transition period to assist the industry in adapting.

The regulations are expected to be officially implemented within 2025, with a transition period allowing the industry time to understand the content of the provisions and compliance requirements. At that time, relevant companies can plan to apply for licenses and adjust their business operations accordingly, smoothly connecting to the new system.

Next step: Focus on the regulation of OTC and custody services.

With the regulatory framework for stablecoins and trading platforms gradually taking shape, the government will next launch regulatory consultations on over-the-counter (OTC) trading of virtual assets and asset custody services. In addition, the Treasury Bureau has also announced that it will publish a second policy declaration on the development of virtual assets, continuing to establish a clear roadmap for the industry.

This article discusses Hong Kong's regulation of stablecoins! Through the "Stablecoin Regulation Draft", the next step is to regulate OTC and custodial services, first appearing in Chain News ABMedia.