Hong Kong Passes Landmark Stablecoin Licensing Law

Hong Kong has passed a comprehensive stablecoin bill that establishes a licensing regime for fiat-backed stablecoin issuers, overseen by the Hong Kong Monetary Authority (HKMA). Only licensed institutions will be allowed to issue or market stablecoins, with requirements covering reserve management, redemption at par, client asset segregation, anti-money laundering controls, and disclosure. License applications are expected to open by the end of 2025, with full implementation also slated for 2025. The law adopts a risk-based approach aligned with international standards and is intended to protect investors and support industry growth, particularly in response to incidents like the JPEX scandal. Officials expect the legislation to drive innovation in digital payments and cross-border trade and potentially influence global crypto regulation. Early market response shows increased interest in stablecoin-related assets and trading activity in the region.