HKMA to Mandate Stablecoin Holder Identity Verification from August 1 2025 to Strengthen AML/CFT Measures

The Hong Kong Monetary Authority (HKMA) has announced that stablecoin holders in China Hong Kong must undergo identity verification starting August 1, 2025, as part of a regulatory framework aimed at strengthening anti-money laundering (AML) and counter-terrorist financing (CFT) measures. The rules, formalized under the Stablecoins Ordinance and accompanying guidelines, require licensed stablecoin issuers to verify all token holder identities, akin to real-name authentication systems, to mitigate financial crime risks [1]. The HKMA will begin accepting applications for stablecoin issuer licenses from August 1, 2025, to September 30, 2025, marking the regulatory phase’s official implementation [1].

The revised framework mandates that stablecoin issuers obtain HKMA licenses, maintain full backing of tokens with high-quality liquid assets, and establish public registries to enhance market transparency [4]. Kelvin CHAN, Assistant Chief Executive of the HKMA (Regulation and AML), noted the new requirements are stricter than the earlier “white-list” system proposed in a 2025 consultation paper, emphasizing a shift toward proactive risk mitigation [1]. The authority also highlighted the need for issuers to maintain detailed transaction records and holder identity data to ensure compliance with AML/CFT standards [6].

The regulations align with global efforts to address stablecoin risks, such as the U.S. GENIUS Act, while tailoring solutions to China Hong Kong’s market structure [7]. A joint initiative between the People’s Bank of China and the HKMA, known as Payment Connect, underscores cross-border collaboration in digital asset regulation [8]. Analysts suggest the rules could bolster investor confidence by curbing anonymity in stablecoin ecosystems. However, the identity verification requirement may increase operational costs for smaller issuers, potentially leading to market consolidation [4].

The HKMA’s consultation process, which closed in May 2025, emphasized the importance of balancing innovation with financial stability [5]. While the current measures impose strict compliance obligations, the authority acknowledged that technological advancements could allow for future regulatory relaxation [1]. By establishing a public registry, the HKMA aims to enhance accountability, enabling stakeholders to verify issuers’ adherence to regulatory standards [9].

The implementation of these rules reflects the HKMA’s proactive stance in managing digital asset risks. By requiring holder verification and imposing licensing conditions, the authority seeks to foster a secure environment for stablecoin operations while supporting innovation. This approach is likely to influence other jurisdictions considering similar frameworks, positioning China Hong Kong as a key player in shaping global stablecoin regulation [9].

Sources:

[1] BlockBeats, [https://www.theblockbeats.info/en/flash/305083](https://www.theblockbeats.info/en/flash/305083)

[2] HKMA, [https://www.hkma.gov.hk/media/eng/doc/key-functions/ifc/stablecoin-issuers/Consultation_conclusions_aml_stablecoin.pdf](https://www.hkma.gov.hk/media/eng/doc/key-functions/ifc/stablecoin-issuers/Consultation_conclusions_aml_stablecoin.pdf)

[3] CoinCentral, [https://coincentral.com/hong-kong-finalizes-stablecoin-rules-launches-issuer-registry/](https://coincentral.com/hong-kong-finalizes-stablecoin-rules-launches-issuer-registry/)

[4] Eversheds, [https://www.eversheds-sutherland.com/en/netherlands/insights/payment-matters-july-2025](https://www.eversheds-sutherland.com/en/netherlands/insights/payment-matters-july-2025)

[5] HKMA, [https://www.hkma.gov.hk/media/eng/doc/key-functions/ifc/stablecoin-issuers/Consultation_conclusions_on_the_Guideline_on_Supervision_of_Licensed_Stablecoin_Issuers.pdf](https://www.hkma.gov.hk/media/eng/doc/key-functions/ifc/stablecoin-issuers/Consultation_conclusions_on_the_Guideline_on_Supervision_of_Licensed_Stablecoin_Issuers.pdf)

[6] HKMA, [https://www.hkma.gov.hk/media/eng/doc/key-functions/ifc/stablecoin-issuers/Guideline_on_supervision_of_licensed_stablecoin_issuers_eng.pdf](https://www.hkma.gov.hk/media/eng/doc/key-functions/ifc/stablecoin-issuers/Guideline_on_supervision_of_licensed_stablecoin_issuers_eng.pdf)

[7] Paul Weiss, [https://www.paulweiss.com/insights/client-memos/genius-act-ushers-in-comprehensive-federal-regulation-of-payment-stablecoins](https://www.paulweiss.com/insights/client-memos/genius-act-ushers-in-comprehensive-federal-regulation-of-payment-stablecoins)

[8] Hogan Lovells, [https://www.hoganlovells.com/en/publications/the-payments-newsletter-including-digital-assets-blockchain-july-2025](https://www.hoganlovells.com/en/publications/the-payments-newsletter-including-digital-assets-blockchain-july-2025)

[9] CoinCentral, [https://coincentral.com/hong-kong-finalizes-stablecoin-rules-launches-issuer-registry/](https://coincentral.com/hong-kong-finalizes-stablecoin-rules-launches-issuer-registry/)