In a significant step toward regulating digital assets, the Hong Kong Special Administrative Region Government formally published the Stablecoin Ordinance in the Gazette on May 30.
It is anticipated that the now-lawful legislation will go into force later this year. Only licensed institutions will be permitted to issue or sell fiat-referenced stablecoins, or cryptocurrencies that are linked to legal money like the US dollar or the Hong Kong dollar, under the new structure.
Retail Investors Can Buy Stablecoins Only via Licensed Channels Under New Hong Kong Rule
The rule, which aims to improve consumer protection and stop financial wrongdoing, also allows retail investors to buy stablecoins, but only through approved means.
The Ordinance reflects Hong Kong’s aim to strike a balance between strong regulatory standards and promoting financial innovation.
It complies with international legislative trends and implements a series of steps to create a transparent, safe environment for virtual assets.
The action was taken in the face of increased international scrutiny of stablecoins, which are becoming more widely recognized as systemically significant to the larger financial system.
Hong Kong preserves its financial stability while establishing a formal licensing structure that puts it as one of Asia’s top jurisdictions for compliant digital asset activities. It is anticipated that more regulations and enforcement tools will be introduced in the upcoming months.
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Hong Kong Accelerates Crypto Reforms to Become Global Digital Asset Hub
Hong Kong is rapidly overhauling its cryptocurrency regulations to establish itself as a global digital asset hub.
In May 2025, the government enacted the Stablecoin Ordinance, requiring fiat-pegged stablecoin issuers to obtain licenses and comply with strict reserve and risk management standards.
The Securities and Futures Commission (SFC) has also ramped up oversight, expanding licensing for digital asset trading platforms and exploring approvals for crypto derivatives and margin lending.
To boost investor confidence, Hong Kong has increased regulatory staffing, aligned over-the-counter derivatives reporting with European standards, and introduced tax exemptions on crypto gains for hedge funds and private equity firms.
These efforts reflect the city’s commitment to balancing innovation with investor protection.
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Only Licensed Firms Can Issue and Sell Stablecoins Under Hong Kong’s New Ordinance
Under Hong Kong’s newly gazetted Stablecoin Ordinance, only institutions that receive formal licenses will be allowed to issue and sell fiat-backed stablecoins within the region. This includes stablecoins pegged to currencies such as the Hong Kong dollar or U.S. dollar.
In addition, only these licensed stablecoins can be offered to retail investors, marking a significant step toward stricter consumer protections and financial oversight.
The Hong Kong Monetary Authority (HKMA) has emphasized that although the law is now officially enacted, it has not yet granted any licenses to stablecoin issuers.
The Ordinance is expected to take effect later this year, giving market participants time to prepare for compliance.
This move underscores Hong Kong’s intention to tighten controls over its digital asset landscape while aligning with global standards on stablecoin regulation.
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