Hong Kong’s Stablecoin Ordinance will come into effect on August 1, 2025, when the city’s financial regulator, the Hong Kong Monetary Authority (HKMA), will officially open its new licensing regime for stablecoin issuers.
The ordinance comes into force to bring transparency and safety to the fast‑growing digital asset market by requiring all issuers to secure a licence before operating.
Under an invitation application system, prospective applicants must first pass an initial assessment by the HKMA before receiving formal application documents. The move comes as regulators worldwide seek to balance innovation with consumer protection.
Invitation‑Only Licensing
Unlike typical licence applications, where companies download forms and submit materials at will, Hong Kong will invite candidates to apply.
Two people familiar with the plan told Caixin that the HKMA will reach out to firms it considers potential stablecoin issuers.
During this preliminary phase, regulators will review whether companies meet basic eligibility criteria, such as capital requirements, governance structure, and compliance frameworks. Only after a positive initial review will the HKMA send out the official application package.
Emphasis on Real‑World Use Cases
One source also explained that the HKMA places heavy weight when it comes to application scenarios. Regulators will look closely at how an issuer is planning on integrating stablecoins into existing payment systems.
They will assess whether token‑backed assets are held in secure, audited accounts and examine the technological safeguards against hacking or operational failures.
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This focus on real‑world viability reflects broader concerns that some digital‑asset projects may lack practical utility or proper risk controls.
Regulatory Caution
Hong Kong’s invitation approach underscores the cautious stance it is playing. According to a second source, the HKMA has been consistent in defining its supervisory reach.
It wants to ensure that only applicants with robust compliance measures and clear business models enter the market.
This careful vetting contrasts with more open regimes elsewhere, where licences can be granted on a first‑come, first‑served basis. By controlling entry, Hong Kong aims to prevent poorly structured tokens from eroding trust in the digital‑asset sector.
Market Reaction
Shares of crypto‑related firms listed in Hong Kong jumped as traders anticipated new business opportunities. Guotai Junan International, which recently won permission to offer crypto trading services, saw its stock climb 16% by midday on the news.
Market participants expect that licensed stablecoin issuers will tap local banks for custody and payment rails, boosting volumes for both financial centres and trading platforms.
Broader Industry Implications
Industry leaders say Hong Kong’s model could become an example for other financial hubs. By blending innovation with strict oversight, the city seeks to position itself as a leader in regulated digital finance.
Licensing stablecoin issuers under a clear legal framework may attract institutional investors who have so far been wary of unregulated tokens.
It also sends a signal to international technology firms that Hong Kong is ready to welcome compliant crypto projects.