Hong Kong has taken a decisive leap into the future of digital finance with the enactment of the Stablecoins Ordinance (SO), making it one of the first jurisdictions globally to implement a comprehensive regulatory framework for certain stablecoin issuers. Certain stablecoin issuers in Hong Kong have until 31 October 2025 to apply for a licence application under the new regime.

The new stablecoin regime

The SO (Cap. 656) establishes a new framework that enables the HKMA to licence and oversee activities involving designated stablecoins, granting the regulator a suite of investigatory and enforcement powers.

Scope of regulation

The legislation creates a licensing regime for issuers of specified stablecoins i.e. fiat-referenced stablecoins. The SO draws on provisions from other financial services laws like the Payment Services and Stored Value Facilities Ordinance (PSSVFO), Securities and Futures Ordinance (SFO) and the Banking Ordinance (BO).

Stablecoins tied to other assets, like precious metals, currently fall outside the new regime but the HKMA is given powers to bring them into scope in future. Fiat-referenced stablecoins based on algorithms, rather than reserve assets, are also excluded.

Licensing requirements

Persons conducting ‘regulated stablecoin activity’ must obtain a licence from the HKMA.

All specified stablecoin issuers will be held to the same regulatory standards, with some exceptions for Authorised Institutions (which are HKMA authorised banks). Rules include AML/CFT, governance, audit, disclosure, and risk management. The regime also requires issuers to ensure that holders can redeem stablecoins at par value in a timely manner.

If an issuer is not licensed to issue stablecoins by the HKMA, then their stablecoin can only be offered by ‘Permitted Offerors’ to professional investors. Permitted Offerors include Authorised Institutions, SFC licensed corporations and SFC licensed virtual asset trading platforms. Stablecoins not classified as specified stablecoins are not covered by Hong Kong’s stablecoin regime, though other laws may apply depending on the stablecoins’ structure and features.

What’s happening next?

Interested licence applicants are encouraged to contact the HKMA for a discussion on their background and business model, and the HKMA’s regulatory expectations.

Where the parent company of the potential applicant conducts a digital asset related business or other financial services overseas, the HKMA may consult the home regulator on its views on the expansion of the group’s activities into issuing specified stablecoins in Hong Kong.

There will be a three-month period, ending on 31 October 2025, for pre-existing specified stablecoin issuers to submit a licence application which will allow them to continue their operations in Hong Kong. If they do not submit a licence in that period, then they must close their business in Hong Kong on or before 30 November 2025.