Hong Kong Set to Approve First Stablecoin Licences by Year-End Under Strict New Regulatory Regime

Hong Kong Eyes First Stablecoin Licences Under New Law Rolling Out in August

Hong Kong is gearing up to approve its first batch of stablecoin licences by the end of 2025, as the city prepares to enforce its new regulatory framework on 1 August.

According to Christopher Hui, Secretary for Financial Services and the Treasury, the number of licences will be limited, likely staying in the “single digits”, with the aim of prioritising quality over quantity.

The Hong Kong Monetary Authority (HKMA), the region’s de facto central bank, is currently consulting the market on how to implement the new Stablecoins Ordinance.

Hui confirmed that formal guidelines will be issued later this month, covering areas such as anti-money laundering and risk management requirements.

Licences to Be Selective and Purpose-Driven

Unlike the speculative reputation surrounding many digital assets, Hong Kong’s approach puts emphasis on function.

Hui stressed that stablecoins must serve meaningful use cases—particularly in cross-border transactions, where traditional systems are inefficient or unreliable.

He said stablecoins could “facilitate cross-border transactions and reduce transaction costs”, especially in places where local currencies are more volatile or the financial infrastructure remains underdeveloped.

The new rules will focus on fiat-backed stablecoins, meaning only digital tokens fully backed by legal tender reserves will qualify for approval under the licensing regime.

Offshore Yuan Stablecoins in Spotlight

While the framework initially centred on stablecoins tied to the Hong Kong dollar, interest is growing around the possibility of offshore yuan-backed options.

Tech heavyweights JD.com and Ant Group are reportedly lobbying for regulatory green lights to issue such tokens, as demand builds for digital alternatives to the yuan in global trade.

Hui explained that if a stablecoin involves a foreign currency, Hong Kong authorities would need to engage with the issuing country’s regulators.

He told local media outlet Ming Pao,

“We must engage in discussions with the relevant authorities,”

He also added that exchange rate risks and cross-border impacts must be assessed in these cases.

Big Names Already in the Sandbox

The stablecoin sandbox launched last year by the HKMA has attracted a diverse range of participants, including Standard Chartered Bank, Animoca Brands, Hong Kong Telecommunications, JD Coinlink, and RD InnoTech.

These trials have helped shape the forthcoming guidelines and prepared the groundwork for the formal regime.

Hong Kong’s Crypto Strategy Diverges From Beijing

Despite China’s nationwide ban on cryptocurrency trading and mining, Hong Kong has chosen to establish a regulated framework to attract legitimate players in the digital asset space.

The city’s licensing efforts for both crypto exchanges and stablecoin issuers form part of a broader ambition to become a regional hub for regulated crypto innovation.

Meanwhile, China’s central bank governor Pan Gongsheng has publicly acknowledged that stablecoins, along with central bank digital currencies (CBDCs), are reshaping the global financial system.

This signals a growing awareness of digital currencies even at the highest levels of the mainland’s financial leadership.

Could Stablecoins Fix Cross-Border Payment Pain Points?

With rising demand for faster, cheaper, and more reliable international payments—particularly in emerging markets—the promise of fiat-backed stablecoins is hard to ignore.

If properly regulated, they could offer a bridge where traditional finance struggles.

Hong Kong’s move to formalise this space could set a benchmark, especially if it succeeds in balancing innovation with financial stability.

The real question is whether other jurisdictions will follow Hong Kong’s playbook—or end up playing catch-up.