Photo credit: Ansel Lee via Pexels
The Legislative Council of Hong Kong has passed the Stablecoins Bill, establishing a licensing framework for fiat-referenced stablecoin (FRS) issuers. The law makes it necessary for FRS issuers to obtain a license from the Hong Kong Monetary Authority (HKMA) to sell stablecoins to the public.
In a post on X, Legislative Council member Johnny Ng Kit-Chong said:
It is expected that by the end of this year, major institutions will be able to apply to the Hong Kong Monetary Authority to become licensed stablecoin issuers.
The new ordinance outlines stringent requirements for issuers of stablecoins in Hong Kong as well as issuers who claim to maintain a stable value referencing the Hong Kong dollar. This includes robust reserve asset management and redemption, segregation of client assets, and adherence to anti-money laundering and counter-terrorist financing requirements.
Christopher Hui, Secretary for Financial Services and the Treasury, emphasizes the ordinance’s focus on a risk-based approach aligned with international regulatory standards, laying “a solid foundation for Hong Kong’s virtual asset market”.
HKMA Chief Executive Eddie Yue describes the framework as “risk-based, pragmatic, and flexible,” designed to support the healthy and sustainable development of Hong Kong’s stablecoin and broader digital asset ecosystem.
On Monday, the US Senate advanced its own legislation to regulate stablecoins, putting Hong Kong’s bill in a global context of increased stablecoin legislation.
