Hong Kong’s Stablecoin Bill Takes Effect, Licensing Regime Now in Force

Key Points

1. The Stablecoin Bill took effect on August 1, requiring issuers of fiat-referenced stablecoins in Hong Kong to obtain a license from the Hong Kong Monetary Authority.

2. Hong Kong is among the first regions to regulate stablecoins, aiming to compete with jurisdictions like the U.S. and Singapore.

3. The law encourages the development of non-USD stablecoins, such as HKD and offshore CNY stablecoins, to diversify beyond USD dominance in regional markets.

4. The framework allows banks in Hong Kong to issue licensed stablecoins under strict regulatory oversight.

5. The licensing regime includes reserve and compliance requirements to ensure stablecoins can be redeemed at par value even if the issuer collapses.