Hong Kong’s Legislative Council has officially passed the Stablecoin Bill, establishing a comprehensive licensing framework for fiat-backed stablecoin issuers. This legislative move positions the city as a potential global hub for digital assets and Web3 innovation.
Under the new law, any entity issuing stablecoins in Hong Kong—or those backed by the Hong Kong dollar, regardless of the issuer’s location—must obtain a license from the Hong Kong Monetary Authority (HKMA). The ordinance outlines stringent requirements for reserve asset management, redemption protocols, and risk controls to safeguard public and investor interests.
Legislative Council member Johnny Ng Kit-Chong announced the bill’s passage on May 21, noting that major institutions are expected to apply for licensing by the end of the year. Ng emphasized that stablecoins must be fully backed by fiat currency reserves and encouraged global enterprises to consider issuing stablecoins in Hong Kong.
Ng highlighted the potential of stablecoins to drive innovation in retail payments, cross-border trade, and peer-to-peer transactions. He also suggested that offering interest to stablecoin holders could enhance their competitiveness, attract broader adoption, and contribute to sustainable growth in the sector.
The Stablecoin Bill is part of Hong Kong’s broader strategy to enhance its competitiveness as a global digital asset hub. The city has been actively developing its virtual asset market, with initiatives such as the HKMA’s stablecoin issuer sandbox project, which currently includes three active participants.
The ordinance is expected to come into effect later this year, marking a significant step in Hong Kong’s commitment to fostering financial stability and encouraging financial innovation in the digital asset space.
