- Hong Kong creates a regulated framework for fiat-referenced stablecoins.
- Stablecoins not legally recognized as tender.
- Licenses required for market operations.
On August 1, 2025, Hong Kong’s new Stablecoins Ordinance came into effect, establishing a regulatory framework for fiat-referenced stablecoins under the oversight of the Hong Kong Monetary Authority.
The ordinance offers legal clarity for stablecoin usage, potentially affecting Hong Kong’s fintech landscape by enabling regulated issuers to enter the market without designating stablecoins as legal tender.
Legal Framework for Stablecoins
Hong Kong has established a legal framework for fiat-referenced stablecoins with its new ordinance. The Stablecoins Ordinance was passed on May 21, 2025, and provides a formal structure for licensing such stablecoins as regulated financial instruments.
The Hong Kong Monetary Authority (HKMA) plays a central role in the regulatory oversight. While stablecoins will be regulated, no licences have been issued yet, and they are not recognized as legal tender by the Hong Kong government.
Market Impact
This ordinance opens up potential avenues for stablecoin issuers but stops short of granting them full legal tender status. The decision may impact Hong Kong’s financial market dynamics by introducing a structured pathway for stablecoin introduction.
The regulatory clarity aims to protect investors, ensuring compliance with Hong Kong’s financial laws. The focus is on fiat-referenced stablecoins, excluding cryptocurrencies like Bitcoin, from the new legal framework, affecting market strategies.
Future Prospects in Digital Assets
The ordinance could reshape the digital assets landscape, encouraging innovation within the regulated space. Stablecoins linked to fiat currencies are expected to gain prominence, although their universal acceptance remains unsupported by existing laws.
The move aligns with Hong Kong’s historical approach of regulating digital assets according to risk profiles. The framework could potentially influence similar future regulatory developments globally, enhancing the legitimacy of stablecoins.
“As of today, no licence has been issued by the HKMA. In future, the public may refer to the register of licensed stablecoin issuers as shown on the HKMA’s website.” – HKMA
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