Hong Kong’s New Stablecoin Regulations Pave Way for Global Institutional Rollout

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The global digital asset landscape is undergoing a transformative shift, and Hong Kong is positioning itself at the forefront with a bold regulatory move. With the official release of the Hong Kong Digital Assets Development Policy Declaration 2.0 (Policy Declaration 2.0), the city has laid out a comprehensive roadmap to strengthen its role as a leading international hub for digital finance. A central pillar of this strategy is the formal regulation of stablecoins — digital currencies pegged to fiat assets — set to take effect on August 1, 2025.

👉 Discover how global institutions are preparing for Hong Kong’s new stablecoin era.

A Strategic Push for Digital Leadership

In a statement on July 1, Christopher Hui, Hong Kong’s Financial Secretary, emphasized that the updated policy covers key areas including regulatory optimization, product expansion, real-world application development, and talent cultivation. The goal? To solidify Hong Kong’s status as a global digital asset center.

Stablecoins are emerging as a critical enabler in this vision. Unlike volatile cryptocurrencies such as Bitcoin or Ethereum, stablecoins offer price stability by being backed 1:1 with reserve assets like the U.S. dollar or Hong Kong dollar. According to the Policy Declaration 2.0, these instruments can provide a cost-effective alternative to traditional financial systems, with transformative potential across payments, supply chain finance, and capital markets.

Enterprises involved in cross-border trade and settlement have already expressed strong interest in leveraging stablecoins to reduce transaction costs and accelerate settlement times. Recognizing this demand, the Hong Kong government and its financial regulators are crafting a supportive yet robust framework to guide stablecoin adoption across practical use cases — from corporate transactions to everyday consumer needs.

Regulatory Clarity: The Stablecoin Ordinance Takes Shape

The cornerstone of Hong Kong’s strategy is the upcoming Stablecoin Ordinance, scheduled to take full effect on August 1, 2025. This legislation introduces a formal licensing regime for stablecoin issuers, marking a significant step toward regulatory clarity in the digital asset space.

Under the new rules, only four types of licensed entities will be permitted to sell stablecoins to the public:

To obtain a license, applicants must meet six core compliance requirements:

  1. Reserve asset management – Full backing of issued tokens with high-quality liquid assets
  2. Redemption mechanism – Clear processes allowing holders to redeem stablecoins at par value
  3. Local operational presence – Requirement to maintain a physical entity in Hong Kong
  4. Capital adequacy – Minimum capital thresholds to ensure financial resilience
  5. Fit-and-proper criteria – Background checks on key personnel and shareholders
  6. Comprehensive risk management framework – Including anti-money laundering (AML) and cybersecurity protocols

This structured approach not only closes previous regulatory gaps but also establishes trust in the ecosystem by minimizing systemic risks such as bank runs or reserve mismanagement.

First Wave of Licensed Issuers Nears Approval

With the regulatory framework now in place, global institutions are racing to enter Hong Kong’s emerging stablecoin market.

JD.com is actively engaging with the HKMA and other regional regulators to ensure its stablecoin operations comply with international standards. Ant International has confirmed it will submit its licensing application promptly once the regulatory gateway opens. Meanwhile, Chint Group’s cross-border payment platform, YeePay, stated via the SSE Interactive Network that it will assess and apply for approval as soon as pathways are clear.

“Given the August 1 effective date, we plan to formally apply for a stablecoin issuer license,” said an industry insider. “Hong Kong could see its first batch of compliant stablecoin launches by the end of 2025.”

HashKey Group Chief Analyst Ding Zhaoxu noted that the ordinance reflects Hong Kong’s ambition to become a global digital asset leader. “It strikes a balance between innovation and risk control,” he said. “By mandating segregated reserves, enforceable redemption rights, and strict AML compliance, the framework builds investor confidence while curbing systemic vulnerabilities.”

Sandbox Testing Fuels Real-World Adoption

Anticipating the formal rollout, the HKMA launched a Stablecoin Issuer Sandbox in 2024. From over 40 applicants, three groups were selected for pilot testing:

These sandbox participants are exploring practical applications such as cross-border remittances, trade settlements, and programmable payments using blockchain infrastructure.

👉 See how fintech leaders are testing real-world stablecoin use cases in Hong Kong.

However, HKMA Chief Executive Eddie Yue was clear: participation in the sandbox does not guarantee future licensing. Applicants must still demonstrate viable business models, strong governance, and meaningful use cases to earn approval.

Beyond the sandbox cohort, more than ten additional local institutions are currently conducting transactional tests in preparation for licensing applications. The bar is high — issuers must prove they operate sustainably and build trust with users and partners alike.

Financial Innovation Meets Traditional Finance

As stablecoins gain traction, synergies between digital asset firms and traditional financial institutions are deepening.

Some prospective issuers are partnering with banks to integrate tokenized cash management solutions into their reserve strategies. This fusion allows for greater transparency, real-time auditing, and improved liquidity management — all critical for maintaining public trust.

At the investment level, asset managers are eyeing opportunities within the growing stablecoin ecosystem. For instance, China Asset Management (Hong Kong) is preparing to launch the Huaxia Hong Kong Dollar Digital Currency Fund, targeting retail investors.

“We’re exploring ways to enable investors to subscribe and redeem using compliant stablecoins,” said Zhu Kaikang, Head of Digital Assets and Family Wealth at Huaxia Fund (Hong Kong). “Once regulations are finalized by the SFC, this integration could significantly boost our fund’s scalability and accessibility.”

Such innovations signal a broader trend: stablecoins are no longer just payment tools — they’re becoming foundational layers in next-generation financial services.

Core Keywords

👉 Learn how compliant stablecoins are reshaping cross-border finance today.

Frequently Asked Questions (FAQ)

Q: When will Hong Kong’s stablecoin regulations take effect?
A: The Stablecoin Ordinance is set to come into force on August 1, 2025, introducing a licensing regime for issuers.

Q: Who can issue stablecoins in Hong Kong?
A: Only entities licensed by the HKMA as stablecoin issuers, along with licensed VASPs, securities firms, and authorized banks may offer stablecoins to the public.

Q: Are all stablecoins legal in Hong Kong?
A: No. Only those issued by authorized entities under the new ordinance will be legally recognized and permitted for public sale.

Q: What assets can back a Hong Kong-licensed stablecoin?
A: Stablecoins must be fully backed by high-quality liquid assets such as cash or short-term government securities equivalent to the issued amount.

Q: Can foreign companies apply for a stablecoin license in Hong Kong?
A: Yes, but they must establish a local presence and meet all regulatory requirements, including capital adequacy and fit-and-proper assessments.

Q: How does Hong Kong’s approach compare to other jurisdictions?
A: Hong Kong’s framework aligns closely with international standards like those from the IMF and FSB, emphasizing transparency, consumer protection, and financial stability — making it attractive for global institutions seeking compliance clarity.