Hong Kong Passes Stablecoin Bill to Launch New Licensing Regime for Crypto Issuers

• Hong Kong now requires stablecoin issuers to get a license from the Hong Kong Monetary Authority.
• Only licensed firms can issue stablecoins and promote them under the new law in Hong Kong.
• Retail users can now access stablecoins with better protection and clear rules under the new system.

The Legislative Council in Hong Kong has passed a stablecoin bill to regulate digital currency issuers. The new framework requires all fiat-referenced stablecoin issuers to secure licenses from the Hong Kong Monetary Authority (HKMA). It introduces clear rules for managing reserves, holding assets separately, and ensuring coins can be redeemed.

Under the new law, only licensed firms can issue stablecoins or promote them in Hong Kong. The bill aims to prevent misleading promotions and block unauthorized advertising. Issuers must allow users to redeem stablecoins at par value under reasonable conditions.

Focus on Stability and Security

The bill demands that issuers maintain value stability through robust operational structures. Each licensee must also implement clear systems for risk management and financial control. Authorities stated that the framework supports user protection and market transparency.

It also outlines the need for audit systems and consistent information disclosure. All license holders must follow strict guidelines on anti-money laundering and the prevention of financial terrorism. The law highlights the government’s intention to stop financial crime and raise industry standards.

Retail Access and Broader Reach

The bill allows retail clients to access stablecoins under the regulated system. Previously, stablecoins were mainly offered to professional investors. The change marks a shift toward broader market participation.

Officials confirmed that only stablecoins approved under this system may be sold to the public. The new rules ensure users receive clear and safe access to digital currencies. Retail users will benefit from strong oversight and regulatory protection.

Global Alignment and Economic Goals

Hong Kong’s new bill aligns with international trends. Other regions, including the United States, are also working on similar regulations. The GENIUS Act in the US Senate reflects a shared goal of regulating stablecoins with global standards in mind.

Authorities believe the move positions Hong Kong to compete globally in digital finance. The framework encourages responsible growth and investor confidence. It aims to balance innovation with regulation to keep pace with global technology developments.

Next Steps and Industry Expansion

The licensing regime will take effect later this year. Consultations will follow to refine standards around reserves, client protections, and data disclosures. Authorities plan to introduce further measures for services such as over-the-counter trading and custodial operations.

This bill comes after Hong Kong launched its virtual asset license system in 2023. Key industry players, including telecom firms and financial institutions, joined the pilot sandbox program. Hong Kong continues expanding its cryptocurrency ecosystem while maintaining financial stability through clear and enforceable rules.