Hong Kong is advancing its regulatory framework for stablecoins with the introduction of the Stablecoins Bill to the Legislative Council. The bill, published in the government’s Gazette on December 6, 2024, and presented for its first reading on December 18, outlines comprehensive measures to oversee stablecoin activities within the region.
The proposed legislation mandates that all stablecoin issuers operating in Hong Kong obtain licenses from the Hong Kong Monetary Authority (HKMA). To qualify, issuers must meet stringent criteria, including assessments of their management, financial resources, the stability mechanisms of their stablecoins, and the adequacy of reserve assets. Additionally, the bill imposes restrictions on the offering and marketing of stablecoins, ensuring that only regulated entities can engage in such activities, thereby enhancing consumer protection.
This legislative move aligns with Hong Kong’s broader strategy to establish a secure and transparent environment for digital assets, fostering innovation while safeguarding financial stability. The bill must undergo three readings in the Legislative Council, involving detailed debates and potential amendments, before being presented to the Chief Executive for final approval and enactment into law.
The introduction of the Stablecoins Bill reflects Hong Kong’s commitment to becoming a leading hub for financial technology by implementing robust regulatory measures that address the complexities of the evolving digital asset landscape.
