- Aug 21, 2025
- 3 min read
Breaking News, Explained: Hong Kong’s LEAP and Licensing for Stablecoin Issuers
Learn what’s changing as Hong Kong launches stablecoin licensing under the LEAP framework and what this shift means for the wider APAC digital asset landscape.
Just at the end of June 2025, the Hong Kong government released its Policy Statement 2.0 on the Development of Virtual Assets in Hong Kong, reaffirming its “commitment to establishing Hong Kong as a global hub for innovation in the digital asset field”. The statement set out a vision for the territory’s digital asset landscape, including a licensing regime for fiat-reference stablecoin (FRS) issuers that took effect on August 1 under the Stablecoins Ordinance.
The Policy Statement 2.0 advances Hong Kong’s long-term ambition to enhance virtual asset regulation, with crypto trading part of this broader goal. It does so by introducing the wider LEAP framework for the digital asset ecosystem, focusing on: Legal and regulatory streamlining; Expanding the suite of tokenized products; Advancing use cases and cross-sectoral collaboration; and People and partnership development.
Who can get licensed? Requirements, restrictions, and exclusions
Under the new regime (including what’s established by the Ordinance and HKMA guidelines), any company carrying on a regulated stablecoin activity, as defined by the Ordinance, is required to obtain a license from the HKMA.
To qualify, issuers will be required to fully back their tokens with high-quality, liquid assets; have minimum paid-up share capital of HK$25 million (US$3.18 million, or an equivalent amount in another currency freely convertible to HK dollars or approved by the HKMA); segregate customer reserves from operational funds and other asset pools, and protect from claims by other creditors, typically through a trust arrangement for the benefit of stablecoin holders; make products redeemable within one day or as soon as practicable; adopt clear organization structures and business practices; and implement robust anti-money laundering and counter-financing of terrorism (AML/CFT) programs aligned with Hong Kong regulation.
Among other criteria, applicants must implement adequate risk management policies and procedures. Each person holding the position of a chief executive, director, stablecoin manager, or controller of the applicant must also be a “fit and proper” person with relevant knowledge and experience.
Importantly, only FRS issuers can receive licenses, meaning stablecoins that are not backed by a reserve asset, like algorithmic stablecoins, are excluded from eligibility.
Suggested read: Understanding Hong Kong’s Crypto Exchange Licensing Regime: Requirements and Implications
Why the LEAP framework matters
The LEAP framework outlines the Hong Kong Government’s approach to digital asset regulation. Under this framework, the Securities and Futures Commission (SFC) will oversee licensing regimes for digital asset dealers and custodians, while the Financial Services and the Treasury Bureau (FSTB) and the HKMA will conduct a legal review to support the tokenization of real-world assets, addressing settlement, registration, and record-keeping rules.
This shows that Hong Kong’s government plans to normalize the issuance of tokenized government bonds and encourage the tokenization of assets like ETFs, gold, and renewable energy infrastructure. It also plans to allow secondary market trading of these products on licensed digital asset platforms while promoting collaboration across regulators, law enforcement, and tech providers, and offering funding for blockchain pilots.
Implications for APAC and beyond
Hong Kong has been clear about its ambition to become a global crypto hub, and the implications of its stablecoins licensing regime extend well beyond the city, influencing digital asset policy across the broader APAC region.
While mainland China maintains a strict ban on crypto-related activities, Hong Kong’s more open regulatory stance presents a contrast, allowing it to act as a hub for digital asset innovation under its autonomous regulatory framework.
Hong Kong’s broader LEAP framework could also serve as a model for regional coordination on digital asset oversight, extending beyond stablecoins to areas such as VASP licensing, tokenization of real-world assets, and stronger AML/CFT safeguards.
In APAC, South Korea is expected to regulate stablecoins following its Digital Asset Basic Act while Singapore introduced stablecoin regulations through the Monetary Authority of Singapore in 2023. Japan, meanwhile, amended its Payment Services Act to restrict stablecoin issuance to licensed companies.
As countries around the world work to clarify the status of digital assets, Hong Kong’s LEAP framework reflects its vision to become a global knowledge hub for digital assets and blockchain innovation.
