- Hong Kong‘s Legislative Council passed a new law to regulate fiat-referenced stablecoins.
- The legislation will take effect later this year and strengthens Hong Kong’s financial sector.
- Key Sandbox participants include Standard Chartered Bank Hong Kong, Hong Kong Telecom (HKT), Animoca Brands, JINGDONG Coinlink Technology, and RD Innotech.
- Stablecoin issuers must have a minimum capital of about $3.2 million and follow strict rules.
- Rulemaking powers are delegated to the Hong Kong Monetary Authority to set more detailed requirements.
Hong Kong approved new legislation on fiat-referenced stablecoins today. The law, passed by the Legislative Council, is expected to take effect later this year. The aim is to strengthen Hong Kong’s status as an international financial hub.
The new regulatory framework requires stablecoin issuers to maintain a minimum capital of about $3.2 million. Penalties will apply to unlicensed companies that market stablecoins in Hong Kong. The law also sets basic reserve requirements for backing stablecoins.
Eddie Yue, CEO of the Hong Kong Monetary Authority (HKMA), said in a statement, “The Ordinance has established a risk-based, pragmatic, and flexible regulatory regime… a robust and fit-for-purpose regulatory environment would provide favourable conditions to support the healthy, responsible, and sustainable development of Hong Kong’s stablecoin and the broader digital asset ecosystem.”
The HKMA launched a stablecoin sandbox last year, which currently includes three projects. One is a joint venture between Standard Chartered Bank Hong Kong, HKT, and Animoca Brands to develop a stablecoin. Another project comes from JINGDONG Coinlink Technology, linked to China’s JD.com. The third member, RD Innotech, is backed by Zhong An Digital Asset Group—affiliated with digital bank ZA Bank—and crypto exchange HashKey.
ZA Bank welcomed the bill, signaling plans to provide banking services for stablecoin reserves. Standard Chartered already offers similar support for stablecoin issuers like Paxos and StraitsX in Singapore.
Although the bill is lengthy, it delegates much of the detailed rulemaking to the HKMA. For example, while reserve assets must be held in the same currency and be of high quality and liquidity, the law does not define specific assets. This approach differs from stricter requirements seen in other regions. Further rules are expected as the HKMA develops its policies.
Any company issuing a stablecoin pegged to the Hong Kong dollar, operating in Hong Kong, or targeting Hong Kong customers must comply.
As context, stablecoins are cryptocurrencies pegged to stable assets, like government-issued money, to keep their value steady. In the United States, similar legislation is progressing, with the GENIUS Act advancing after a procedural vote this week.
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