HKMA Finalizes Stablecoin Framework, No Licenses Issued as of August 1 2025

The Hong Kong Monetary Authority (HKMA) has established a comprehensive regulatory framework for fiat-referenced stablecoin issuers, marking a significant step in aligning the city’s digital finance policies with global standards. Effective August 1, 2025, the framework mandates strict licensing requirements, capital reserves, and transparency measures for entities seeking to issue stablecoins in the region. The new regime, formalized through legislative approval by the Financial Commissioner, aims to safeguard financial stability while fostering innovation in the digital asset sector.

Under the guidelines, stablecoin issuers must maintain a 1:1 reserve ratio of high-quality liquid assets to back their tokens, ensuring parity with fiat currencies and reducing systemic risks. This requirement, akin to international frameworks such as the EU’s Markets in Crypto-Assets (MiCA) regulation, emphasizes the HKMA’s commitment to mitigating volatility and enhancing consumer protection. Only licensed entities will be permitted to engage in retail market activities, with the HKMA establishing a public registry to verify compliance. As of now, no licenses have been issued, and the authority has warned against fraudulent claims, noting that false representations will be treated as criminal offenses under the Stablecoins Ordinance [2].

The regulatory process includes a structured licensing application, with the HKMA encouraging interested firms to submit proposals by September 30, 2025, for early consideration. Over 40 companies have already expressed interest, though the HKMA has emphasized rigorous due diligence and compliance checks [3]. The framework also incorporates anti-money laundering (AML) protocols, requiring issuers to implement robust transaction monitoring and customer verification processes. Explanatory notes published by the HKMA outline transitional arrangements for existing projects, ensuring a phased adoption of the new rules [4].

Industry reactions highlight both opportunities and challenges. While the 1:1 reserve mandate strengthens trust in stablecoins, analysts suggest that the stringent criteria may lead to market consolidation, with smaller or unregulated issuers potentially exiting Hong Kong. Coincu research notes that regulatory clarity could eventually attract institutional investors, bolstering the region’s position as a hub for compliant digital finance [5]. Meanwhile, Tether USDt (USDT) remains a market benchmark, maintaining its $1 peg with a $163.6 billion market capitalization as of July 29, 2025 [1].

The HKMA’s approach balances innovation with risk mitigation, reflecting global trends in stablecoin oversight. By setting high governance standards and public accountability, the authority aims to instill confidence in digital assets while preventing speculative hype. As the licensing process unfolds, the absence of issued licenses underscores the regulator’s cautious stance, with market participants advised to await formal approvals before engaging with new stablecoin offerings.

Sources:

[1] HKMA Finalizes Stablecoin Rules, Warns No Licenses Issued (Cointelegraph, [https://cointelegraph.com/news/hong-kong-stablecoin-guidelines-no-licenses-issued](https://cointelegraph.com/news/hong-kong-stablecoin-guidelines-no-licenses-issued))

[2] Hong Kong’s Stablecoin Licensing Kicks Off—No Licenses Issued Yet (Live, [https://www.livebitcoinnews.com/hong-kongs-stablecoin-licensing-kicks-off-no-licenses-issued-yet-sparks-market-buzz/](https://www.livebitcoinnews.com/hong-kongs-stablecoin-licensing-kicks-off-no-licenses-issued-yet-sparks-market-buzz/))

[3] Implementation of Regulatory Regime for Stablecoin Issuers (HKMA, [https://www.info.gov.hk/gia/general/202507/29/P2025072900703.htm](https://www.info.gov.hk/gia/general/202507/29/P2025072900703.htm))

[4] Hong Kong Finalizes Stablecoin Regulations, Sets August 1 as Launch Date (Defi Planet, [https://defi-planet.com/2025/07/hong-kong-finalizes-stablecoin-regulations-sets-august-1-as-launch-date-for-new-framework/](https://defi-planet.com/2025/07/hong-kong-finalizes-stablecoin-regulations-sets-august-1-as-launch-date-for-new-framework/))

[5] Hong Kong Says No Stablecoin Licenses Issued Yet (CryptoSlate, [https://cryptoslate.com/hong-kong-says-no-stablecoin-licenses-issued-yet-warns-of-legal-risks-for-impostors/](https://cryptoslate.com/hong-kong-says-no-stablecoin-licenses-issued-yet-warns-of-legal-risks-for-impostors/))