Hong Kong's Stablecoins Ordinance to Take Effect from August 1

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Hong Kong is set to enforce its new Stablecoins Ordinance on August 1, 2025, introducing stringent regulations for fiat-referenced stablecoin (FRS) issuers, covering licensing and compliance criteria. The legislation mandates that all FRS offered to retail investors must be licensed by the Hong Kong Monetary Authority (HKMA).

Ahead of the ordinance taking effect, the HKMA has issued a public warning urging investors to avoid unlicensed stablecoin offerings amid unjustified “euphoria,” emphasizing the need for sustainable digital asset markets. The authority expressed concerns over “undue speculation” and misleading promotions, highlighting the necessity for robust risk management.

Chief Executive of the HKMA, Eddie Yue, said,

We urge the public to stay vigilant to avoid violating the law inadvertently. The public should also stay cautious if you come across marketing of unlicensed stablecoins during this period.

The upcoming regulatory move aligns Hong Kong with standards in other jurisdictions, such as the European Union's Markets in Crypto-Assets Regulation (MiCA). However, Hong Kong's approach is notably strict, incorporating criminal penalties to enhance consumer protections.

The ordinance is part of Hong Kong's broader strategy to establish itself as a leading hub for regulated digital assets trading in Asia. The HKMA has indicated that only a limited number of stablecoin issuer licenses will be granted initially, urging applicants to present clear and feasible plans.