August 1, 2025
Crypto

HKMA’s strict stablecoin regime to shape Hong Kong’s crypto future


Hong Kong’s stablecoins ordinance, which took effect on Friday, puts cryptocurrency’s most-traded cash substitute under the same regulatory framework as banks, triggering a rush for a limited number of licences from the Hong Kong Monetary Authority (HKMA).

Some market observers were caught by surprise after learning that the first batch of stablecoin licences was only expected to be issued early next year, as the regulator adopted a prudent approach to ensure the sustainable development of its digital asset initiative.

The HKMA said on Tuesday that only “a handful” of licences would be issued initially, to calm a hyped-up market. Since the beginning of this year the share prices of some companies have soared simply after suggesting plans to develop stablecoin operations, as the prospects of crypto and digital asset adoption become more mainstream.

While the key benefits of stablecoins – digital tokens backed by fiat currencies or other reserve assets – such as cost savings, efficiency and transparency were established, the number of successful candidates could be limited due to the HKMA’s stringent criteria aimed at making the city a leading digital asset hub, according to analysts.

Many local, mainland Chinese, regional and global players have expressed interest in applying for stablecoin licences. Photo: Shutterstock
Many local, mainland Chinese, regional and global players have expressed interest in applying for stablecoin licences. Photo: Shutterstock

“The regime will filter out those unable to align with the strict regulations, produce viable use cases and demonstrate financial stability,” said Cora Ang, head of legal and compliance for Asia-Pacific at Amina Group, a Swiss financial services firm focused on virtual assets.



Source link

Leave a Reply

Your email address will not be published. Required fields are marked *

We use cookies on our website to give you the most relevant experience by remembering your preferences and repeat visits. By clicking “Accept All”, you consent to the use of ALL the cookies. However, you may visit "Cookie Settings" to provide a controlled consent. View more
Accept
Decline