Hong Kong Enacts Stablecoin Law Poised to Transform Cross-Border Payments, Wealth Management

Hong Kong has enacted a comprehensive Stablecoins Ordinance aimed at establishing the city as a global hub for stablecoin innovation while ensuring financial stability through robust regulatory requirements. The ordinance mandates full reserve backing, stringent AML/CFT protocols, transparency, and segregation of customer funds, with the Hong Kong Monetary Authority overseeing a competitive licensing process expected to issue fewer than 10 licenses initially. This regulatory clarity is driving strong interest from big tech companies, large banks, and fintech startups, as stablecoins present new opportunities for faster, cheaper cross-border payments and wealth management services, appealing to both local and international clients. Hong Kong's regulatory approach parallels recent U.S. legislation, such as the GENIUS Act signed by President Donald Trump, which also aims to foster innovation and adoption of stablecoins within a secure framework. Meanwhile, regional Asian financial hubs are accelerating their stablecoin policies, spurred by increased demand and geopolitical momentum around U.S. dollar-pegged cryptocurrencies. Industry leaders like Coinbase report stablecoin revenues growing significantly, highlighting stablecoins as a reliable and expanding revenue source in the evolving digital payments landscape.