Hong Kong develops strict stablecoins rules in support of the crypto ecosystem

Hong Kong will implement new rules for stablecoin issuers on Friday, as Asian regulators ramp up oversight in response to  President Donald Trump’s push to advance US dollar-pegged tokens.

The rules will tightly govern the issuance of stablecoins linked to the Hong Kong dollar and their associated marketing and distribution activities.

Additionally, strict rules have been established for issuing a stablecoin license. According to these rules, firms dealing with Stablecoins must present their application before a September 30 deadline. After following this step, it is anticipated that the central bank will release the first approvals at the beginning of next year, the Hong Kong Monetary Authority (HKMA) said.

Hong Kong develops strict stablecoins rules in support of the crypto ecosystem 

Following Trump’s pro-crypto stance, he recently introduced a stablecoin law and signed it on July 18. This was a significant move for the US president, as he believes that this law will enable the US to achieve its goal of becoming the global leader of the crypto space and finance as a whole. While not all, several stablecoins are pegged to the US dollar.

Concerning the recent stablecoin regulations in Hong Kong, it is worth mentioning that it is viewed as a place to conduct regulatory tests in China. This was observed after it was revealed that China now supports cryptocurrencies linked to the yuan, after years of forbidding them.

Robin Xing, a managing director at Morgan Stanley, weighed in on the topic of discussion. He explained that China intends to be independent of the US dollar as a payment method using stablecoins. Based on Robin Xing’s argument, this digital currency can be useful in broader cross-border payments as it is reliable and can lower the transaction cost.

The managing director said that since Hong Kong’s stablecoin market is still under development, it will take some time to fully effect the changes. 

Ideally, stablecoins users have adopted a strategy to back their digital assets with a mixture of monetary assets. This is because they can easily manage the value of monetary assets and maintain their worth near the currency they stand for.

Another significant requirement to obtain a license is to have a capital of around 25 million Hong Kong dollars or an equal sum in another currency that can be exchanged. 

The stablecoin rules aim to reduce cryptocurrency risks and prevent anti-money laundering activities.

50 businesses in Hong Kong apply for a stablecoins license

Following Hong Kong’s stablecoin rules, analysis from sources reveals that around 50 businesses are expected to apply for the permits. However, the HKMA stated that they will have “a high bar” for licensing and only “a few licences” will be issued at the outset.

These applicants include Jack Ma, backed by Ant Group Co.’s international unit and an online retailer, JD.com’s subsidiary. RD InnoTech Ltd, a firm backed by former HKMA chief Norman Chan, also intends to apply. The HKMA, Ant Group, and JD. Com declined to comment on the applications.

In an email, a spokesperson from RD InnoTech stated their intentions: they want to start with a stablecoin tied to the Hong Kong dollar, targeting business-to-business cross-border payments.

According to the representative,  the new regulations and infrastructure could help set the stage for tokenizing the Renminbi offshore, referring to the official name of the Chinese yuan. 

The Hong Kong Monetary Authority says it will introduce a six-month transitional period for existing stablecoin issuers as the city’s new Stablecoin Ordinance takes effect on August 1, 2025.

This initiative supports Hong Kong’s goal of becoming a regulated digital asset hub, while strengthening oversight of firms issuing fiat-backed cryptocurrencies.

During this transition, the HKMA will grant temporary licenses to applicants with a clear plan for achieving full regulatory compliance. Companies must submit formal license applications within three months or face potential shutdown within the subsequent four months.

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