The Hong Kong Monetary Authority (HKMA) has released updated licensing and anti-money laundering (AML) guidelines for stablecoin issuers. These initiatives align with international standards and aim to mitigate the risks of money laundering and terrorist financing.
New Licensing Guidelines from HKMA
The updated licensing rules will take effect from August 1, 2025, establishing a licensing regime for fiat-referenced stablecoin (FRS) issuers. The new regulations include requirements for proper reserve backing, redemption mechanisms, risk management, and robust AML controls.
HKMA has published two sets of guidelines. The first, 'Supervisory Guidelines for Licensed Stablecoin Issuers,' outlines the supervisory expectations for stablecoin issuers, requiring them to conduct customer due diligence measures before issuance and redemption.
Comparison with GENIUS Act and MiCA Regulations
The updated HKMA guidelines follow the implementation of the GENIUS Act in the U.S., which establishes clear rules for stablecoin issuance. The act mandates that dollar-backed stablecoins hold 100% of reserves in liquid assets and report reserve compositions monthly.
In Europe, the Markets in Crypto-Assets Regulation (MiCA) imposes reserve requirements, transparency, and licensing for crypto-asset service providers. This regulation became effective on December 30, 2024, aimed at preventing market abuse and ensuring consumer protection.
Benefits for Stablecoin Issuers
The updated licensing and AML guidelines from HKMA, alongside GENIUS and MiCA regulations, provide significant advantages for stablecoin issuers. They offer clarity that helps issuers understand and meet regulatory expectations, reducing legal risks.
With HKMA's guidelines, issuers can confidently plan their operations, gaining access to a large and diverse investor base. The regulations also protect issuers from fraud risks while ensuring adequate reserve assets, enhancing stability in the market.
The introduction of new licensing and anti-money laundering measures in Hong Kong, together with the GENIUS Act and MiCA regulations, lays the foundation for further development in the stablecoin market, enhancing trust and safety for both issuers and users.
