The Hong Kong Stablecoins Ordinance and related implementation guidelines (the “Ordinance”), which came into effect on 1 August 2025, sets out a regulatory framework for the issuance and offering of specified stablecoins in Hong Kong as well as provides the Hong Kong Monetary Authority (“HKMA”) with licensing, investigatory and enforcement powers for stablecoin activities. The Ordinance is an important step towards facilitating the development of the stablecoin and digital asset ecosystem in Hong Kong and Hong Kong becoming an international centre for digital assets.
The Ordinance is aimed to regulate :-
- issuers of stablecoins and the structure of stablecoins;
- offers of stablecoins; and
- market integrity and conduct issues.
What is a Specified Stablecoin?
The Ordinance primarily regulates a specified stablecoin, which is defined as a stablecoin that purports to maintain a stable value with reference wholly to one or more official currencies or one or more units of account or stores of economic value, or a combination of any 2 or more of the above, or a digital representation of value, or of value of a class specified by the HKMA (Section 4).
Section 3 of the Ordinance provides a technical definition of a stablecoin : as a cryptographically secured digital representation of value that :-
- is expressed as a unit of account or store of economic value;
- is used, or intended to be used, as a medium of exchange accepted by the public for payment for goods or services, discharge of a debt and/or investment;
- can be transferred, stored or traded electronically;
- is operated on a distributed ledger or similar information depository; and
- purports to maintain a stable value with reference to a single asset, or a pool or basket of assets.
However, stablecoins do not include digital currencies issued by a central bank or government, securities or futures contract defined under the Securities and Futures Ordinance, stored value facilities deposit under the Payment Systems and Stored Valued Facilities Ordinance or deposit under the Banking Ordinance.
Stablecoin License
A stablecoin licence is required in the event a person carries on a regulated stablecoin activity, that is a person that :-
- issues a specified stablecoin in Hong Kong in the course of business;
- issues a specified stablecoin outside Hong Kong in the course of business that purports to maintain a stable value with reference (whether wholly or partly) to Hong Kong dollars; or
- actively markets, whether in Hong Kong or elsewhere to the Hong Kong public that the person carries on, or purports to carry on, an activity that, if carried on in Hong Kong, would constitute a regulated stablecoin activity.
The Ordinance provides a rigorous licensing regime and a stablecoin license will not be granted unless the HKMA is satisfied that the applicant will fulfill the criteria set out in Schedule 2 of the Ordinance. Licensed issuers are subject to a comprehensive set of ongoing obligations designed to ensure stability, transparency, and consumer protection. Below is a summary of some of the core requirements :-
- Place of incorporation : Applicants for licence must be companies incorporated in Hong Kong, or authorised institutions incorporated abroad (e.g. banks) but with a principal place of business in Hong Kong.
- Financial resources : The licensee must have adequate financial resources and liquid assets to meet its obligations, with a paid-up share capital not less than HK$25 million, or an equivalent amount approved by the HKMA.
- Reserve assets management : The licensee must maintain a pool of reserve assets for that type of specified stablecoin and ensure that the specified reserve assets pool is segregated from other pool of reserve assets, with minimum values for the assets, and being of high quality and high liquidity.
- Redemption rights: The licensee must provide holder a right to redeem the specified stablecoin without any conditions that is unduly burdensome, and must not charge a fee for it. Payment requests by the holder of a specified stablecoin are to be honoured as soon as practicable.
- Non-interest bearing : Issuers are prohibited from paying any interest, profit, or other return to stablecoin holders.
- Governance : Senior management and key personnel of a licensee must be a “fit and proper” person to hold such position.
- AML : Licensees must adhere to strict anti-money laundering and counter-financing of terrorism rules.
Conclusion
For pre-existing stablecoin issuers operating in Hong Kong before 1 August 2025, the Ordinance provides a 6-month transitional period (i.e until 31 January 2026) and these entities must submit a license application by 31 October 2025 and comply with an undertaking to adhere to the new rules. Those who have not applied by 31 October 2025 would enter into a closing down period.
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