Hong Kong Enacts Stablecoin Licensing Rules Effective August 2025

Hong Kong’s regulatory landscape for stablecoins is undergoing a significant transformation as the city mandates licensing for all fiat-backed stablecoin issuers. Effective August 1, 2025, the Hong Kong Monetary Authority (HKMA) has introduced the Stablecoin Ordinance, requiring all entities issuing fiat-referenced stablecoins—particularly those linked to the Hong Kong dollar—to obtain a license [5]. The regulation marks a pivotal step in the city’s broader strategy to balance financial innovation with stability and consumer protection.

Under the new regime, the HKMA is responsible for overseeing the licensing process, ensuring that all market participants adhere to stringent regulatory requirements, including robust Know-Your-Customer (KYC) and anti-money laundering (AML) protocols [2]. The HKMA will accept applications for stablecoin issuer licenses from August 1 to September 30, 2025 [3], with the authority indicating that it will issue only a limited number of licenses in the initial phase [1]. This selective approach underscores a measured strategy to manage market entry and mitigate potential risks.

The licensing requirement restricts market access for unlicensed stablecoins, effectively limiting their availability to both retail and institutional investors in Hong Kong [2]. As a result, the city’s stablecoin ecosystem is expected to shift toward HKMA-compliant assets, reshaping liquidity dynamics and investment behavior [4]. The regulatory environment favors established financial institutions and entities with the capacity to meet capital and operational standards, potentially sidelining smaller fintech startups that may struggle with compliance [6].

RD Technologies has emerged as a key player in the regulated stablecoin market by securing $40 million in Series A2 funding led by ZA Global and supported by institutional investors such as China Harbour and Hivemind Capital [8]. The firm is developing HKDR, a stablecoin pegged to the Hong Kong dollar, designed to align with the new regulatory framework. RD Technologies has also entered into a memorandum of understanding with ZA Bank to explore the integration of HKDR into digital custody, payment services, and distribution solutions [10]. This development highlights the growing institutional interest in Hong Kong’s digital finance initiatives and the potential for compliant stablecoin platforms to serve as models for other markets.

The new regulatory framework reflects a broader global trend toward structured and controlled entry into the stablecoin market, similar to regulatory shifts seen in Singapore and Europe [5]. By enforcing strict licensing and compliance standards, Hong Kong aims to foster an environment where stablecoin innovation can thrive within a well-regulated framework [4]. This strategy supports the city’s ambition to solidify its position as a global fintech hub while reinforcing its commitment to financial integrity and consumer protection.

Source:

[1] title: HK stablecoin bill raises concerns over client identity rules

url: https://www.techinasia.com/news/hk-stablecoin-bill-raises-concerns-client-identity-rules

[2] title: Hong Kong Enacts Strict Stablecoin Law With Mandatory Licensing and KYC Rules

url: https://cryptodnes.bg/en/hong-kong-enacts-strict-stablecoin-law-with-mandatory-licensing-and-kyc-rules/

[3] title: Regulatory turmoil: Hong Kong issues strictest stablecoin regulations

url: https://www.mexc.com/news/regulatory-turmoil-hong-kong-issues-strictest-stablecoin-regulations-us-seeks-to-build-on-chain-financial-markets/64089

[4] title: Hong Kong Implements New Regulatory Framework for Stablecoin Issuers

url: https://www.lexology.com/library/detail.aspx?g=51ea6d36-0192-41eb-906b-3d8cbd69307f

[5] title: Hong Kong Enacts Landmark Stablecoin Ordinance—Requires all issuers of fiat-referenced stablecoins to obtain a license

url: https://financefeeds.com/hong-kong-enacts-landmark-stablecoin-ordinance-paving-way-for-licensed-issuers/

[6] title: Crypto regulatory affairs: Hong Kong's stablecoin rules take effect, but approvals may take time

url: https://www.elliptic.co/blog/hong-kongs-stablecoin-regulatory-regime-goes-live-with-robust-aml-cft-standards

[8] title: RD Technologies Advances HK's Regulated Stablecoin Future

url: https://connectcx.ai/rd-technologies-advances-hong-kongs-regulated-stablecoin-future/

[10] title: Hong Kong's Stablecoin Ordinance Released: Strict KYC Rules in Place

url: https://kr-asia.com/hong-kongs-stablecoin-rules-take-effect-but-approvals-may-take-time