Hong Kong's stablecoin licensing regime officially took effect on August 1, 2025, requiring all issuers of fiat-referenced stablecoins targeting retail investors to obtain approval from the Hong Kong Monetary Authority (HKMA). The comprehensive framework mandates strict compliance across reserve asset management, redemption at par value, client fund segregation, anti-money laundering protocols, disclosures, and operator fitness tests.
This development follows the U.S. GENIUS Act passage but features key distinctions: Hong Kong's single-regulator approach through the HKMA contrasts with America's layered federal-state system. While both require 100% reserve backing, Hong Kong's active multi-currency rules position it as a flexible global hub. Major banks like Bank of China (Hong Kong) and Standard Chartered are leading early applications, leveraging existing regulatory advantages. Issuers must apply by September 30 for first-batch consideration or risk shutdown by November.
Interest focuses on B2B and cross-border use cases rather than retail payments, where markets are saturated. Edwin Cheung of Gate Dubai noted mainland Chinese firms are exploring stablecoins for international transactions, with examples like travel companies reducing 30-day payment cycles. Securities firms are also adapting—44 brokers upgraded licenses for trading, custody, and tokenized asset services.
Challenges include a HK$25 million (~$3.2M) minimum capital requirement that may exclude smaller innovators. Experts like Chavanette Advisors' Tiena Sekharan advocate tiered thresholds and passporting for compliant foreign issuers. Regulators simultaneously warn investors against speculative hype, emphasizing due diligence on asset backing.