Thomas Daniels
Hong Kong has formally passed its Stablecoin Bill, establishing a regulatory framework for fiat-backed stablecoins and positioning the city as a global Web3 hub.
On May 21, 2025, Hong Kong’s Legislative Council approved the Stablecoin Bill, introducing a licensing regime for fiat-referenced stablecoin issuers. Under this new law, any entity issuing stablecoins in Hong Kong, or those backed by the Hong Kong dollar, must obtain a license from the Hong Kong Monetary Authority (HKMA).
The legislation mandates that stablecoins be fully backed by fiat currency, with stringent requirements on reserve asset management, redemption processes, and risk controls. These measures aim to protect investors and ensure financial stability. Only licensed institutions are permitted to offer or advertise such stablecoins to the public.
Financial Secretary Christopher Hui emphasized that the ordinance adheres to the principle of “same activity, same risks, same regulation,” fostering a robust regulatory environment. HKMA Chief Executive Eddie Yue described the regime as “risk-based, pragmatic, and flexible,” supporting the sustainable development of Hong Kong’s digital asset ecosystem.
Legislative Council member Johnny Ng Kit-Chong highlighted the bill’s role in advancing Hong Kong’s Web3 infrastructure. He noted the potential of stablecoins to drive innovation in retail payments, cross-border trade, and peer-to-peer transactions. Ng also suggested that offering interest to stablecoin holders could enhance competitiveness and market share.
The global market for yield-bearing stablecoins has seen significant growth, reaching $11 billion in circulation and accounting for 4.5% of the total stablecoin market, up from $1.5 billion at the start of 2024.
Hong Kong’s move aligns with international trends, as jurisdictions worldwide develop regulatory frameworks for stablecoins. The city’s proactive approach aims to attract global enterprises and institutions interested in issuing stablecoins, reinforcing its status as an international financial center.
