Hong Kong Enforces Stablecoin Licensing to Boost Digital Asset Regulation

Hong Kong implemented a new licensing regime for stablecoins on August 1, 2025, under the Stablecoins Ordinance, marking a major shift in its digital asset regulatory framework. The Hong Kong Monetary Authority (HKMA) and the Securities and Futures Commission (SFC) now require stablecoin issuers to obtain licenses and comply with stringent requirements, including capital adequacy, anti-money laundering (AML) and counter-terrorist financing (CFT) controls, and guaranteed redemptions. The regulation applies to fiat-backed stablecoins such as USDT and USDC, with exchanges failing to comply being forced to suspend or halt their services. Several platforms, including “One Bitcoin” and “5X Crypto,” have already suspended USDT and USDC trading, while others, like “BitsMark,” have reportedly shut down operations [3].

The new licensing framework represents a pivotal step in Hong Kong’s effort to become a global hub for digital assets. By introducing a structured and transparent regulatory environment, the city aims to attract compliant stablecoin issuers and foster innovation. The regime also allows for the issuance of stablecoins pegged to the Hong Kong dollar and Chinese yuan, potentially challenging the dominance of U.S. dollar-based stablecoins in Asian markets [2].

From a global perspective, Hong Kong’s move aligns with broader regulatory trends. The U.S. enacted the GENIUS Act in July 2025, requiring stablecoin issuers to maintain 1:1 reserve ratios, while the EU’s Markets in Crypto-Assets (MiCA) regulation enforces similar oversight. This regulatory alignment suggests that Hong Kong is not only positioning itself as a competitive market but also adhering to international standards. Notably, local firms are already capitalizing on the new framework—OSL Group has raised $300 million to develop stablecoin infrastructure, signaling investor confidence in Hong Kong’s digital asset ecosystem [3].

The regulation’s immediate impact is evident in the market. As of August 9, 2025, USDT continues to trade at $1.00 with a market cap of $164.53 billion and a 4.23% market dominance. However, daily trading volumes have decreased by 14.84%, reflecting the impact of reduced exchange activity [3]. The Coincu research team notes that as regulatory clarity improves, capital is likely to flow toward compliant exchanges, reinforcing market trust and stability [3].

Hong Kong’s approach contrasts sharply with mainland China’s strict stance on stablecoins. While the mainland intensifies its crackdown on stablecoin promotions to mitigate fraud and capital outflows, Hong Kong is fostering a regulated environment that supports innovation and international participation. The city has already licensed 11 exchanges and 44 crypto-related firms, demonstrating its commitment to a well-structured digital finance sector [4].

Despite these developments, challenges remain. The potential for yuan-backed stablecoins in Hong Kong is significant, particularly as discussions in mainland China have gained traction following a high-level meeting in Shanghai in July 2025. However, direct development is hindered by mainland restrictions, creating uncertainty about the future of such initiatives [7].

In summary, Hong Kong’s new stablecoin licensing regime introduces a structured and transparent framework for stablecoin issuance. While the immediate effects include operational adjustments for exchanges and a reduction in trading volumes, the long-term goal is to solidify Hong Kong’s position as a key player in the global digital asset market. By balancing innovation with regulation, the city aims to attract international firms while ensuring financial stability and investor confidence [3].

Sources:

[1] China Regulators Move to Suppress Stablecoin Promotion ... [https://crypto-economy.com/china-regulators-move-to-suppress-stablecoin-promotion-amid-fraud-fears/](https://crypto-economy.com/china-regulators-move-to-suppress-stablecoin-promotion-amid-fraud-fears/)

[2] Hong Kong's Stablecoin Bill Takes Effect, Licensing ... [https://cryptorank.io/ru/news/feed/dae2f-hong-kong-stablecoin-licensing-regime-takes-effect](https://cryptorank.io/ru/news/feed/dae2f-hong-kong-stablecoin-licensing-regime-takes-effect)

[3] Stablecoin Market Cap Soars 4.87% to $261B Following ... [https://cryptonews.com/news/stablecoin-market-cap-soars-4-87-to-261b-following-22-month-growth-streak/](https://cryptonews.com/news/stablecoin-market-cap-soars-4-87-to-261b-following-22-month-growth-streak/)

[7] China's Stablecoin Crackdown: Regulatory Pushback in 2025 [https://defi-discovery.com/news/china-stablecoin-regulation-2025/](https://defi-discovery.com/news/china-stablecoin-regulation-2025/)