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The Stablecoins Ordinance (Cap. 656) was first introduced as the Stablecoins Bill (C3117), gazetted by the Financial Services and the Treasury Bureau (FSTB) on 6 December 2024. The Bill passed the Legislative Council on its third reading on 21 May 2025 and was brought into operation on 1 August 2025 by commencement notice made by the Secretary for Financial Services and the Treasury.
The Ordinance creates a new licensing regime under the Hong Kong Monetary Authority (HKMA) for fiat-referenced stablecoins (FRS) — defined as cryptographically secured digital representations of value that purport to maintain a stable value by reference to one or more official fiat currencies. The regime is distinct from the Securities and Futures Commission's (SFC) licensed virtual-asset trading platform (VATP) regime under the Anti-Money Laundering and Counter-Terrorist Financing Ordinance (AMLO Cap. 615) amendments of June 2023, which covers exchange/trading activity. Together they constitute Hong Kong's layered crypto-asset oversight architecture.
An HKMA stablecoin licence is required for any person who: 1. Issues an FRS in Hong Kong — regardless of the currency reference 2. Issues an FRS pegged to the Hong Kong dollar anywhere in the world — the key extra-territorial assertion: a Singapore- or Cayman-incorporated issuer of an HKD-backed stablecoin must hold an HK licence or commit an offence under Cap. 656 3. Actively markets the issuance of an FRS (limbs 1 or 2) to the Hong Kong public
The extra-territorial HKD-peg clause is a novel jurisdictional template not previously seen in the register — analogous to the extraterritorial reach of the EU's MiCAR for euro-referenced EMTs marketed to EU persons, but applied specifically to currency-peg jurisdiction rather than market-access jurisdiction.
| Requirement | Specification |
|---|---|
| Minimum paid-up capital | HK$25 million (or HKMA-approved equivalent) |
| Reserve asset segregation | 100% backing; segregated from issuer's own assets; held in HKMA-approved high-quality liquid instruments |
| Redemption right | Holders can redeem at par on demand; issuer cannot impose lock-ups or haircuts |
| Reserve composition | Restricted to cash, bank deposits, short-duration HK government bonds or equivalent HKMA-approved instruments |
| AML/CFT | Full compliance with AMLO Cap. 615 obligations applicable to licensed corporations |
| Fit-and-proper | Directors, CEOs, and substantial controllers subject to HKMA approval |
| Audit | Annual audited accounts + quarterly reserve attestations |
Existing operators with live stablecoin issuance activities as of 1 August 2025 may continue operations under a six-month transitional window (expiring 31 January 2026), provided they submit a licence application to the HKMA before that date. Operators who fail to apply by 31 January 2026 must wind down issuance activities or face criminal prosecution.
The HKMA is empowered to:
must decide whether to apply for HKMA licences to serve the HK market. Tether's USDT is US-dollar referenced (not HKD-pegged), so the extra-territorial clause does not apply; only limb 1 (issuance in HK) or limb 3 (active marketing) could trigger. Circle and Paxos face analogous analysis. The reserve-asset segregation and redemption-at-par requirements may constrain the commercial treasury-management models that Tether/Circle currently operate.
regulatory pathway for CNH-backed stablecoins issued in Hong Kong — potentially enabling HK's role as a controlled offshore-RMB digital-asset clearing centre, under HKMA/PBoC oversight, consistent with Beijing's CBDC internationalisation strategy and distinct from direct PBoC e-CNY. This is the most strategically significant downstream implication for the IPTM register's China-USD monetary-competition subtheme.
for a dedicated stablecoin-issuer licensing regime. Singapore's MAS Stablecoin Framework (MAS Notice PSN08, 2023) covers stablecoins within the Payment Services Act but as a sub-category; Japan's FSA Payment Services Act 2023 amendments and Korea's Virtual Asset User Protection Act Stage 2 are frameworks rather than dedicated ordinances. HK Cap. 656 is structurally closer to EU MiCAR Title III/IV (Reg 2023/1114) and the US GENIUS Act (S.394) — dedicated stablecoin statutory instruments — than to any existing Asia-Pacific instrument.
structural bid for short-duration HK government paper and HKMA Exchange Fund Bills whenever licensed issuance scales. Material for HK fixed-income market-structure analysis.
adjusting reserve-asset composition, capital thresholds, and fit-and-proper criteria by HKMA Notice rather than primary legislation — creating a fast-amendment pathway that should be tracked via HEARTBEAT for IPTM register updates.
transitional deadline?
Hong Kong — and how will HKMA coordinate enforcement with overseas regulators?
MAS framework, or does it attract compliance-first issuers seeking EU MiCAR equivalence?