Starting Friday, August 1, Hong Kong will implement new rules regarding stablecoin issuers as part of efforts to enhance oversight in the crypto industry.
New Regulations for Stablecoins in Hong Kong
The rules will closely govern the issuance of stablecoins linked to the Hong Kong dollar as well as their marketing and distribution activities.
Additionally, strict requirements have been established for obtaining a stablecoin license. Firms dealing with stablecoins must submit their applications by the September 30 deadline. Following this, it is expected that the central bank will issue the first approvals at the beginning of next year, according to the Hong Kong Monetary Authority (HKMA).
Applications for Stablecoin Licenses
Approximately 50 businesses in Hong Kong are anticipated to apply for licenses under the new stablecoin rules. The HKMA stated that they will set a high bar for licensing, with only a few licenses being issued initially.
Among the applicants are companies backed by Ant Group and JD.com. A representative from RD InnoTech expressed intentions to start with a stablecoin tied to the Hong Kong dollar aimed at B2B cross-border payments.
Regulatory Goals and Future of Stablecoins
The regulation of stablecoins in Hong Kong is intended to reduce cryptocurrency risks and prevent money laundering activities. The HKMA will introduce a six-month transitional period for existing stablecoin issuers, effective from August 1, 2025. During this time, temporary licenses will be granted to applicants with a clear plan for achieving full regulatory compliance.
Hong Kong's new rules could represent an important step in creating a regulated ecosystem for digital assets and maintaining oversight over firms issuing fiat-backed cryptocurrencies.
