Hong Kong’s Stablecoin Ordinance Effective August 2025

Hong Kong has announced the implementation of its new Stablecoin Ordinance, which will commence on August 1, 2025. This development is spearheaded by Financial Secretary Christopher Hui and is coordinated with the Hong Kong Monetary Authority.

The ordinance, described as Asia’s most advanced, may enhance market confidence and increase the participation of institutional investors. Regional and global stablecoin markets will watch closely for Hong Kong’s regulatory effects.

The Hong Kong government’s decision to implement the Stablecoin Ordinance is seen as a crucial step for the region’s digital asset ecosystem. The new framework outlines a licensing regime that offers clear guardrails for stablecoin activities. Official documentation states that this will support the sustainable development of stablecoins, as quoted by Financial Secretary Christopher Hui:

After the Ordinance commences operation, the licensing regime will provide suitable guardrails for relevant stablecoin activities. It will be a milestone in facilitating the sustainable development of the stablecoin and digital asset ecosystem in Hong Kong.

Key actions include the establishment of a mandatory licensing structure for stablecoin issuers operating in or targeting Hong Kong. The ordinance, passed by the Legislative Council and gazetted in May, underscores the government’s commitment to creating a robust regulatory environment for digital assets.

Immediate effects are anticipated in the form of increased institutional interest and potential liquidity shifts. By restricting the advertising of stablecoins to licensed issuers only, the regulation aims to safeguard against deceptive practices while fostering investor protection and confidence.

Financial implications include possible growth in Total Value Locked (TVL) within local DeFi protocols. The ordinance is expected to influence regional and global stablecoin markets, potentially increasing adoption and investment in Hong Kong-compliant stablecoin assets.

Potential long-term effects may include increased institutional investment and regulatory clarity across Asian financial markets. Historical trends indicate that clear, stablecoin-friendly regulations often lead to increased trading volumes and liquidity, as market participants seek compliant environments.