Hong Kong Stablecoin Bill

Hong Kong Stablecoin Bill, an ordinance passed on May 21, 2025, establishing a licensing regime for issuers of fiat-referenced stablecoins in Hong Kong, which became the Stablecoins Ordinance effective August 1, 2025.

What is Hong Kong Stablecoin Bill?

The Hong Kong Stablecoin Bill was passed by the Legislative Council of Hong Kong SAR, China on May 21, 2025, to regulate the issuance of fiat-referenced stablecoins (FRS), a type of digital asset designed to maintain a stable value pegged to fiat currencies like the Hong Kong dollar. Under this regime, administered by the Hong Kong Monetary Authority (HKMA), any entity issuing FRS in Hong Kong or claiming stability referenced to the Hong Kong dollar must obtain a license, with requirements including full backing by high-quality reserve assets, segregation of client funds, robust stabilization mechanisms, and redemption at par value within reasonable timelines. Licensees must also adhere to anti-money laundering (AML) and counter-terrorist financing (CFT) standards, risk management protocols, regular auditing, and fitness and propriety assessments for key personnel.

The ordinance prohibits unlicensed FRS offerings to retail investors and restricts advertisements to only those from licensed issuers, including during a six-month transitional non-contravention period starting August 1, 2025. Pre-existing issuers had until October 31, 2025, to apply for licenses, with the HKMA confirming 36 applications received by the end of September 2025, and initial approvals anticipated in early 2026. This framework aligns with the “same activity, same risks, same regulation” principle, enhancing investor protection and supporting Hong Kong’s digital asset ecosystem while preventing fraud and maintaining financial stability.

As part of broader digital asset regulations, the ordinance complements existing rules for trading platforms and sets the stage for further consultations on over-the-counter trading, custodian services, and a second policy statement on digital assets, fostering sustainable industry growth in Hong Kong.