Hong Kong Stablecoin Law Takes Effect August

Hong Kong is set to implement a new stablecoin regulatory framework starting August 1, 2025, requiring issuers of fiat-backed stablecoins to obtain a license from the Hong Kong Monetary Authority (HKMA). This ordinance represents one of the strictest stablecoin licensing regimes globally, aiming to provide regulatory guardrails to support the sustainable development of the stablecoin and digital asset ecosystem in the city. The regulation mandates licensees to meet financial, operational, and anti-money laundering requirements, including a minimum paid-up capital and the ability to redeem stablecoins without undue restrictions. Industry leaders like Teddy Liu of Jingdong Coinlink see stablecoins as transformative for cross-border payments, especially benefiting small and medium enterprises by reducing costs and improving efficiency. While Hong Kong positions itself as a crypto-friendly hub, the law’s stringent conditions have sparked debate on whether it will foster innovation or primarily favor larger players capable of meeting compliance demands. The government has also begun consultations on regulatory guidelines covering anti-money laundering and counter-terrorism financing measures as part of broader virtual asset regulation efforts.