What are the new highlights of the stablecoin bill passed by Hong Kong after GENIUS in the United States?

Original author: Ethan, Odaily Planet Daily

On the evening of May 21, the "Stablecoin Bill" submitted by the Hong Kong Special Administrative Region Government at the end of 2024 was approved by the Hong Kong Legislative Council for the third reading and finally it will take effect after the signing of the Chief Executive and the gazetted law. At this point, Hong Kong has become the world's first jurisdiction to establish a comprehensive regulatory framework for fiat currency-linked stablecoins, and the compliant Hong Kong stablecoin is expected to be officially launched before the end of this year.

At the same time, the U.S. Senate passed a procedural vote on the GENIUS Act 2025 at 66:32 on May 19, trying to provide federal supervision for the US dollar-pegged stablecoins (recommended reading: The GENIUS Act is expected to pass the Senate, and stablecoin regulation ushers in a historic breakthrough). This article will deconstruct its core content based on the original text of the Hong Kong Stable Coin Act "Regulations" (Gaoist No. C 3116-C 3684), compare the US Stable Coin Act "GENIUS Act", and gather industry views to explore the similarities and differences and impacts of the two major regulatory frameworks.

Deconstruction of Hong Kong Stablecoin Act

Original text of the Stablecoin Bill

The Stablecoin Bill has 11 parts, 175 articles and 8 appendixes, covering the licensing system, licensee responsibilities, regulatory powers and sanctions. The following is a review of some of the contents that the author believes are more important based on the original text:

Definition and scope:

· Stablecoin definition: refers to a token that uses fiat currency pegged to stablecoins, which are anchored by fiat currency (such as Hong Kong dollar and US dollar) to maintain stable value.

· Regulated activities: including issuance of stablecoins, management of reserve assets and provision of stablecoin-related services.

License system:

· The issuer must apply for a license from the Hong Kong Monetary Authority, and the applicant is limited to accredited institutions outside the company or accredited institutions outside Hong Kong.

· Minimum registered capital of HK$25 million to ensure financial strength.

· Unlicensed engaging in regulated activities or false advertising is a crime and may be fined and imprisoned.

Licensee responsibilities:

· Reserve management: Stable coins need to be anchored to legal currency 1:1, and reserve assets need to be fully covered and regularly audited.

· Consumer Protection: Forced unconditional redemption rights to ensure that users can redeem at face value at any time.

· Management requirements: Licensed persons must appoint CEO, director and stablecoin manager, which must be approved by the Hong Kong Monetary Authority.

· Regulation and Sanctions: The Hong Kong Monetary Authority may require licensees to provide information, conduct investigations or appoint legal administrators. Sanctions include fines, licensing revocation and criminal liability, unlicensed activities, sales of non-licensed providers, etc., and liable for fines up to HK$5 million and imprisonment of up to HK$10 million and imprisonment of 10 years upon conviction on prosecution; fraudulent acts are subject to fines up to HK$10 million and imprisonment of 10 years.

· Transitional arrangements: Existing stablecoin issuers must apply for licenses or exit the market before the effective date (expected to take effect within 2025).

Comparison with the US "GENIUS Act"

GENIUS Act Overview

GENIUS Act (S. 394) aims to provide a federal regulatory framework for USD-pegged payment stablecoins, promote innovation and maintain the global status of the USD (as is known from Article 1 of the Act). The bill was filed on February 4, 2025 and passed a procedural vote on May 19, and has not been finalized.

Comparative analysis

Summary of core differences and strategic positioning (differences):

Regulatory framework and market positioning

· Hong Kong: Adopt a centralized and unified regulatory model, led by the Financial Management Specialist, supports the issuance of stablecoins anchored by Hong Kong dollar and US dollar, and balances financial stability and innovation based on the "risk-based" principle, aiming to create an international diversified stablecoin ecosystem and strengthen Hong Kong's compatibility as an international financial center.

· United States: Implement tiered supervision (federal and state coordination), focus on the dominance of the dollar stablecoin, and require issuers with a market value of over US$10 billion to be included in federal supervision, with the core of "protecting the dollar hegemony + preventing and controlling systemic risks", limiting the compliance of non-US dollar stablecoins, highlighting geostrategic considerations.

Regulatory Strictness and Market Influence

· Hong Kong: Setting strict requirements such as HK$25 million minimum equity, 100% high liquidity reserve assets, and 72-hour mandatory redemption. Although it improves market stability, it may increase the compliance costs of small and medium-sized institutions, which may curb innovation in the short term, but it will help build investor trust in the long term.

· United States: Reserve assets allow combinations of short-term Treasury bonds, repurchase agreements, etc., with high investment flexibility, but strict restrictions on non-USD stablecoins; tiered supervision gives small issuers state-level regulatory options, but may lead to inconsistent regulatory standards and high enforcement complexity.

Consumer Protection and International Coordination

· Hong Kong: Mandatory licensed institutions sell to retail investors, standardize advertising, and guide the market to orderly and comply with the temporary license transition period (6 months), and consumer rights protection measures are more direct.

· United States: Focus on monthly disclosure of reserve assets and anti-money laundering requirements, but consumer redemption protection and information disclosure frequency (Hong Kong is regularly audited, and the United States is monthly disclosure) is relatively weak, and it depends on federal and state-level regulatory coordination. International mutual recognition mechanisms are still being explored (such as establishing reciprocal arrangements with overseas jurisdictions).

Core consensus and industry impact (same points):

· Regulatory consensus: Both require stablecoin reserve assets to cover 100% of circulation, prohibit misappropriation or high-risk investment, reflecting the international principle of "same activities, same risks, same supervision".

· Industry impact: The Hong Kong bill is more likely to promote the pilot of offshore RMB stablecoin, thus becoming a "digital bridge" for RMB cross-border payments; the US bill consolidates the dominance of the US dollar in the stablecoin field. The two start from "diversity and inclusiveness" and "dollar center" to shape different paradigms of global stablecoin regulation.

Overall, the Hong Kong bill attracts global capital and diversified stablecoin projects with "compliance building + open innovation", while the US bill maintains local financial hegemony with "dollar dominance + risk prevention and control". The differences between the two essentially reflect the trade-offs of different economies in terms of financial stability, monetary strategy and innovation inclusiveness.

Various opinions

Hong Kong community member GFF.eth (@GF 41536085):

On May 19, the Senate procedurally passed the US stablecoin bill "GENIUS Act", and then on May 21, Hong Kong passed the stablecoin bill. Regardless of whether it is just a pure performance or not, at least the prerequisites for all the processes of RMB internationalization have been opened. Stablecoins are financial nuclear weapons. Now all the pre-insurances before launch have been opened, fingerprints, passwords, and iris have been lifted. Next, it depends on whether the decision makers dare to press the button. Do you dare to issue RMB on Ethereum? If you send Hong Kong dollar stablecoin after a long time, it would be a joke. The Hong Kong dollar implements a linked exchange rate system, which is the US dollar stablecoin. It is really a waste of time to turn the US dollar stablecoin into a stablecoin.

Gary Tiu: Executive Director and Head of Regulatory Affairs, OSL Group

OSL Group actively participates in the discussion on Hong Kong's stablecoin policy formulation, witnessing and promoting the formation of the stablecoin framework. The Hong Kong Stablecoin Act sets unified standards for industry development, which helps improve transparency and long-term stability.

Wu Jiezhuang (@Johnny_nkc): Member of the Chinese CPPCC, Hong Kong

Legislative Council, and Head of the Hong Kong Web3 Cryptocurrency Leadership Group

Hong Kong's promotion of crypto stablecoins makes Hong Kong an international Web3 financial center. Relying on the 1.4 billion population and dividends of mainland China, it will not only launch Hong Kong dollar stablecoins, but also offshore RMB stablecoins and other stablecoins, embracing cryptocurrencies, Web3, and stablecoins. Today's bill pass rate is only the first step in the Web3 infrastructure. I hope to promote it with you: First, create application scenarios - stablecoin issuance is the first step, and the most important thing is to create more stablecoin application scenarios. Whether it is physical retail, cross-border trade, transaction reciprocity, I think there is great potential space and opportunity to promote the implementation of stablecoins. Calling on friends from all walks of life in traditional and physical scenarios to understand and embrace stablecoins, which will be an important financial innovation; the other is to improve the attributes of the stable market, including releasing stablecoin interest to holders. Release of interest will help enhance the market competitiveness of stablecoins, and can also release incentives to allow more people to participate, expand the market share of the entire stablecoin, thereby helping the development of stablecoins.

Wall Street Experience:

On May 21, the Legislative Council of the Hong Kong Special Administrative Region passed the "Stablecoin Bill" in the third reading, marking the formal inclusion of the stablecoin, a virtual asset, into the legal regulatory system. At the same time, the US government has also stepped up its promotion of stablecoin legislation. As major financial centers are establishing their own digital currency systems to ensure that the currency has greater monetary control in the digital financial era, this "violation battle for digital minting rights" may have just begun.