Hong Kong officially enters a new era of stablecoin regulation with the implementation of the Stablecoin Ordinance on August 1.
Who Can Stay on the Market?
According to the new law, all stablecoin issuers must obtain a license from the Hong Kong Monetary Authority (HKMA) to operate legally. Issuers will be able to apply for a license after August 1, 2025, and have a 6-month transitional period. If they fail to meet the requirements, they will have to exit the market.
Implications of the New Law
The new law creates significant changes in the stablecoin market. It is expected that compliant issuers, such as Circle, will gain an advantage and quickly dominate the market. Smaller and non-compliant projects will face strict requirements for licensing and reserve transparency, which could lead to their exit from the market.
Future of Hong Kong as a Stablecoin Hub
Hong Kong aims to become a hub for stablecoin operations in Asia. Clear regulatory rules will attract international projects and could drive financial transformation in the region. Fierce competition is expected to create new opportunities for quality projects.
The introduction of the Stablecoin Ordinance will significantly impact the market, not only in Hong Kong but also in other Asian countries.
