Hong Kong Stablecoin Regulations to Take Effect August 1 – Here’s What Changes

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Jai Pratap

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Jai Pratap

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Jai serves as the Asia Desk Editor for Cryptonews.com, where he leads a diverse team of international reporters. Jai has over five years of experience covering the web3 industry.

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June 6, 2025

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Hong Kong’s stablecoin regulations will officially take effect on August 1, 2025, according to a Gazette notice published Thursday, following the ordinance’s ratification on May 30.

The new law introduces a licensing framework for stablecoin issuers and service providers operating in Hong Kong. The first batch of licenses is expected to be granted later this year. In parallel, the Financial Secretary issued a notice specifying that unlicensed stablecoin issuers may only offer tokens to “professional investors” as defined under the Securities and Futures Ordinance.

Reserve Requirements and Issuer Obligations

The regulatory framework mandates full reserve backing with high-quality, liquid assets such as cash, bank deposits, or government securities held in the same currency as the stablecoin. These reserves must be segregated from the issuer’s own funds, held in trust, and shielded from creditor claims.

Issuers are prohibited from paying interest on stablecoins but may offer non-interest-based incentives. They must be locally incorporated with key personnel based in Hong Kong and meet minimum capital requirements of HKD 25 million or 1% of the total stablecoin issuance, whichever is greater. Redemption at par within one business day is required under normal conditions.

The Hong Kong Monetary Authority has launched a consultation on accompanying guidelines, including measures related to anti-money laundering and counter-terrorism financing.

Hong Kong Leaps Ahead in Regulating Stablecoins

“The upcoming implementation of the Ordinance heralds a structured regulatory environment for stablecoin operations,” said Secretary for Financial Services and the Treasury Christopher Hui. He described the law as a “significant milestone” in advancing Hong Kong’s digital asset ambitions.

The stablecoin ordinance forms part of a broader push by the city to establish comprehensive regulatory clarity around crypto assets, with more nations likely to follow. Currently, the US congress is in the middle of passing the Genius Act which will regulate stablecoins in the country in a similar manner as to Hong Kong.