Hong Kong Stablecoin Ordinance takes effect August 1st

Hong Kong’s Monetary Secretary, Paul Chan Mo-po, has acknowledged that the stablecoin ordinance will come into impact from 1 August 2025, in accordance with a China Each day report printed on 23 June 2025. This may make Hong Kong the world’s first regulated regime for stablecoins.

The implementation of the ordinance will observe its passage on 21 Might 2025 by Hong Kong’s Legislative Council. It mandates entities or people issuing a fiat-referenced stablecoin (FRS) or Hong Kong Greenback-pegged tokens throughout the administration to acquire licenses from the Hong Kong Financial Authority (HKMA).

Solely licensed establishments can provide FRS, enabling retail buyers to entry stablecoins. The laws states that these guidelines purpose to guard the general public and the buyers. Moreover, to minimise fraudulent behaviour, the ordinance solely permits adverts for licensed FRS issuers.

Mo-po has emphasised Hong Kong’s position as a testing floor for China’s monetary innovation and a launch pad for a Yuan-pegged stablecoin for use for cross-border transactions.

Moreover, it places China’s central financial institution ready to make use of Hong Kong as a testing floor for different cost strategies to internationalise the Yuan.

The use case for Hong Kong as a sandbox is supported by the town’s offshore Yuan liquidity pool, estimated at round 1 trillion Yuan ($139 billion).

The licensing necessities put forth by the HKMA concentrate on a number of key elements reminiscent of reserve asset administration, correct separation of shopper belongings and resilient stabilisation mechanisms.

Hong Kong’s stablecoin regulation is now legislation.Beginning Aug 1, 2025, a license from HKMA is required to concern any fiat-pegged stablecoin.

Pegged to HKD or any fiat? You are regulated—regardless of the place you are primarily based.#Stablecoins #CryptoRegulation #Web3Compliance pic.twitter.com/7ieEp2V7FS

— Shyft Community (@shyftnetwork) June 23, 2025

Additionally, provisions within the ordinance point out that issuers should assure that stablecoin holders can redeem their tokens at par worth beneath honest and affordable circumstances.

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Firms Rush in To Change into Certified Issuers

Mo-po acknowledged that a number of companies have already utilized to the HKMA to grow to be certified issuers and that licenses will start to roll out within the coming months.

Reportedly, corporations which have utilized for the HKMA license this month embrace logistics firm Reitar Logtec and the abroad arm of the Chinese language mainland fintech titan Ant Group.

JD.com, the e-commerce large, too, is testing out the HKD pegged tokens via its fintech arm JD Coinlink. A number of different fintech corporations have been experimenting with the stablecoin issuer sandbox since July 2024.

Throughout continents, a number of tech giants within the US are adopting related ways to optimise cross-border cost infrastructure. Firms like Apple, X, Airbnb and Google are in early-stage discussions with numerous crypto corporations to combine stablecoins. T

Their resolution to combine stablecoin follows a bipartisan push by the Trump administration and US lawmakers who handed the GENIUS Act and the Readability Act.

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Internationalising the Yuan Faces Headwinds

In line with an article printed by the South China Morning Submit, Yuan’s share of worldwide reserves fell from 2.8% in 2022 to 2.2% in 2024. This took place regardless of Beijing’s speedy deployment of cross-border cost infrastructure.

The article chalks this as much as considerations concerning China’s debt points, deflation and demographic pressures which have dampened capital flows and outweighed beneficial properties in commerce settlements.

“The rise of stablecoins doesn’t signify the creation of a brand new ‘supra-sovereign’ worldwide financial system,” the analysts acknowledged. “As a substitute, they’re simply extensions of fiat cash beneath present rules to facilitate cross-border transactions.”

Moreover, the analysts have additionally steered restoring confidence within the Chinese language Yuan by endeavor structural reforms. This contains revamping social welfare, restructuring debt, reforming taxes and making a extra growth-friendly surroundings, due to this fact internationalising the Yuan.

Issues concerning monetary stability led China to ban crypto transactions in 2021. In latest occasions, nevertheless, the nation has warmed as much as exploring different makes use of for this asset class.

Pan Gongsheng, the Governor of the Individuals’s Financial institution of China through the Lujiazui Discussion board, confirmed that know-how reminiscent of blockchain and distributed ledgers helped advance central financial institution digital currencies (CBDC) and stablecoins, due to this fact reworking cost techniques and dashing up cross-border transactions.

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