CC Look at the World｜Multiple views, clarify the impact of Hong Kong dollar stablecoin in one sentence

Author: Louis , ChainCatcher

Editor : ChainCatcher

On May 21, 2025, the Hong Kong Stablecoin Ordinance officially passed the third reading of the Legislative Council, becoming the first regulation in the Asia-Pacific region to comprehensively regulate stablecoins. According to the Ordinance, all stablecoin projects issued in Hong Kong or pegged to the Hong Kong dollar in the future must obtain a license issued by the Hong Kong Monetary Authority (HKMA). The regulations are expected to be officially implemented by the end of the year, and stablecoin issuers will be able to apply based on this and officially enter the licensed operation stage. On the same day, Hong Kong Legislative Council member Wu Jiezhuang said on social platform: " Today is a milestone in the development of global Web3 and an important step for Hong Kong to become an international Web3 center! "

Despite a lot of in-depth analysis, many readers still find it difficult to quickly understand the core content of the bill and the impact of the market. This issue of "CC Look at the World " brings together many perspectives to help readers sort out the key points and impacts of the Hong Kong dollar stablecoin regulations.

Review of the Development of the Stable Coin Act

This year, stablecoins have developed rapidly with their advantages such as efficient transfer, low cost and information transparency, and their market value has climbed to US$247.48 billion, of which USD-linked products dominate. However, in the process of rapid expansion, stablecoins have also exposed three core problems : first, reserve assets are opaque (such as USDT was revealed to be insufficient reserves); second, the algorithm mechanism is fragile (such as the UST/LUNA system nearly reset to zero in the collapse); third, it is too high dependence on traditional financial institutions (such as USDC's anchor delamination caused by the bankruptcy of Silicon Valley banks). These risks have prompted countries to speed up stablecoin regulatory legislation. Against this background, the Hong Kong government officially published the "Stablecoin Bill" in the Gazette on December 6, 2024, and initiated the legislative process. Since the first reading was completed on December 18, 2024 , it took only five months. The regulations were successfully passed on the third reading on May 21, 2025 , demonstrating the efficiency and firmness of policy promotion.

Key points of Hong Kong 's Stable Coin Act

The bill aims to establish a comprehensive regulatory framework for stablecoins to increase transparency, prevent systemic risks, and protect investors ' rights. Its bill advocates the main focus of fiat currency stablecoins and includes the following core requirements :

• Mandatory license application : All issuers must obtain HKMA license.
• Local entity requirements: The issuer must register in Hong Kong, with a paid-in capital of no less than HK$25 million
• 1:1 Reserve : Stable coins must be fully reserved with high-quality and highly liquid assets, and are consistent with the pegged currency.
• Asset isolation : Customer assets need to be separated from company assets to prevent misappropriation.
• Redemption mechanism: Holders can redeemed face value at any time according to reasonable conditions
• Compliance obligations : including anti-money laundering, risk management, auditing and information disclosure
• Advertising restrictions : Only licensed stablecoins can be promoted to the public to prevent fraud.

Unlike the US GENIUS Act, which adopts a dual federal and state regulatory structure, the Hong Kong Act is regulated by a single HKMA agency, and does not mandate the reserve assets to be cash or short-term Treasury bonds, nor does it explicitly prohibit the payment of interest on stablecoin products. This reflects that Hong Kong tends to be pragmatic regulation oriented towards financial innovation and practical applications.

Unlike the voluntary participation system adopted by Singapore 's "MAS SCS Framework " , the Hong Kong's "Stablecoin Ordinance" implements a mandatory licensing system. Singapore has not completely banned the issuance and circulation of non-MAS-regulated stablecoins, and only restricted their use of the "regulated" tag; while Hong Kong clearly stipulates that only registered stablecoins can be promoted to the public. This difference reflects that Hong Kong's regulatory framework is stricter and comprehensive, with more regulatory focus on risk control, and aims to create a more secure market environment for consumers.

What impact will the implementation of the regulations have?

(1 ) Potential demonstration role for mainland China : The Hong Kong Act may provide the mainland with reference to compliance paths, and promote the integration of blockchain and the real economy through technical output and standard docking.

(2 ) Enhance Hong Kong 's international financial competitiveness : compete with Singapore, Dubai and other places to compete for the status of Web3 financial hub, and Hong Kong enhances investor confidence and attracts global capital through compliance legislation.

(3 ) Inject new liquidity into the crypto market : As a key channel in the digital asset world, stablecoins will greatly help promote the development of RWA (real world asset) transactions, on-chain wage payments, cross-border settlements and Web3 payment infrastructure.

**International voices about the passage of stablecoins in Hong Kong

dollars**

1. Chengyi Ong, head of policy at Asia Pacific, said in an interview with CNBC: "Stablecoins are the backbone of the crypto ecosystem, but their stability also opens the door to overcome frictions that plague traditional finance, such as slow cross-border payments and settlements. This potentially transformative utility has prompted governments around the world from Europe to Asia to take measures to establish regulatory systems to promote the emergence of high-quality stablecoins."

2. YuFeng Gong, Director of Risk and Strategy at HashKey OTC, also mentioned: "Hong Kong's new stable currency policy sets a global benchmark by mandatory full reserve support, strict redemption guarantees and supervision by the Hong Kong Monetary Authority." The policy "ensures traders obtain institutional-level reliability while positioning Hong Kong as a leader in compliant digital finance."

3. David Katz, Vice President of Strategy and Policy, Asia Pacific, said: "Hong Kong has long been a global financial hub, with a deep and liquid foreign exchange market coupled with a regulatory environment conducive to currency exchange. Hong Kong's exchange rate is pegged to the US dollar, coupled with its strong banking infrastructure, making it an ideal location for US dollar exchange."

4. Fiona Murray, managing director of Asia Pacific at Ripple, blockchain company, said: “Given Asia’s status as a global trade hub and its huge remittance traffic, stablecoins will increasingly be used to settle international payments in real time, reducing friction and costs. With stablecoins, users can quickly and efficiently trade and transfer tokenized assets – they can be used 24/7, which is very convenient for both traditional and cryptocurrency markets.”

5. According to Mayer Brown partners Amita Haylock and Justin WJ Lai, the bill provides strict licensing, asset-backed and consumer protection measures. By providing clear regulatory standards, the bill is expected to enhance investors and consumers' confidence in stablecoins, thereby encouraging more market participation and innovation in digital payment systems and decentralized finance.

6. Evan Auyang, president of Animoca Brands Group, said: Hong Kong has raised the threshold for regulatory stability coins. With the passage of the stablecoin bill, Hong Kong has established a license framework and clearly stated its intention: Hong Kong hopes to lead a new chapter in digital finance. By setting strict standards for reserves, redemption and risk management, Hong Kong provides truly clear regulation for stablecoin issuers without stifling innovation.

7. Justin d'Anethan, a consultant at Liquifi Token Advisors, said that Hong Kong's latest stablecoin bill provides a clear regulatory framework for issuers. The bill clarifies specific guidance on reserve management, redemption mechanisms and licensing procedures, which will help improve regulatory transparency. He pointed out that this new regulation is friendly to traditional financial institutions that want to enter the market and is attractive. However, he also admitted that Hong Kong has not yet played a key role in the global stablecoin structure, and its market share and influence still need to be improved.

8. Moody's, one of the three major credit rating agencies in the United States, said in the report that the introduction of this regulatory proposal will help eliminate the long-standing regulatory uncertainty in Hong Kong's stablecoin field, which has been a key obstacle to affecting investor confidence and hindering the widespread adoption of stablecoins. These regulations will improve the transparency and governance quality of stablecoin issuers, and form a "credit positive" role for the entire digital asset industry, which will help the future adoption of stablecoins.

9. The World Economic Forum wrote in a recent article: In recent years, governments have been developing and implementing regulatory frameworks for the widespread use of stablecoins and cryptocurrencies. Experts point out that while fragmented and conflicting regulatory provisions may hinder market development, clear and unified rules will help expand the use of stablecoins.

10. Coin Insider mentioned in the article by Fhumulani Lukoto that the enactment of the bill is a strategic move to consolidate Hong Kong's position as a center for global digital assets. Hong Kong aims to attract reputable stablecoin issuers and promote innovation in the fintech sector by providing clear regulation and strong supervision.