Hong Kong is advancing its stablecoin licensing framework, with new regulations set to take effect by August 1, 2025.
Financial Secretary Paul Chan confirmed the timeline in a blog post published on June 15, aligning with earlier statements from the Hong Kong Special Administrative Region Government. The initiative forms a core part of the city’s broader push to position itself as a global hub for digital assets and blockchain innovation.
In his blog post, Chan explained that the accelerated rollout is a strategic move to solidify Hong Kong’s role in the rapidly evolving digital finance landscape. He cited the surge in global interest and rising demand for digital assets, particularly stablecoins, as key motivations behind the fast-tracked regulatory timeline.
“With the booming digital asset market, demand for stablecoins is expected to rise further,”
Chan stated, underscoring the urgency of implementing a robust framework.
He further highlighted the growing economic weight of stablecoins, pointing to a global market capitalization of approximately US$240 billion and an annual trading volume exceeding US$20 trillion. According to Chan, transparent licensing requirements and a streamlined application process will make Hong Kong more attractive to international stablecoin issuers. This, he said, would not only deepen liquidity but also enhance the city’s overall competitiveness in the digital finance sector.
A notable feature of the upcoming framework is Hong Kong’s adoption of an ‘open model’ for stablecoin issuance. Unlike jurisdictions that limit stablecoins to U.S. dollar pegs, Hong Kong will allow licensed issuers to back their tokens with a range of fiat currencies. This flexible approach is designed to support a wider range of use cases and foster innovation, particularly for issuers creating financial products tied to regional economies.
Chan reiterated these ambitions during the recent Hong Kong Web3 Festival, where he addressed an audience of developers, regulators, and industry leaders. He emphasized the importance of fostering a balanced regulatory environment that bridges the gap between traditional finance and the emerging decentralized economy, reaffirming Hong Kong’s commitment to becoming a global centre for blockchain-driven innovation.
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