Hong Kong Enforces Stablecoin Rules as Firms Face Losses and Compliance Challenges

Hong Kong has officially implemented its stablecoin regulation framework, with the Stablecoin Ordinance taking effect on August 1, 2025 [2]. Under the new rules, stablecoin issuers must be locally incorporated, maintain a 1:1 fiat reserve ratio, and comply with strict anti-money laundering (AML) and counter-terrorist financing (CFT) requirements to obtain a license [2]. The Hong Kong Securities and Futures Commission (SFC) is responsible for overseeing compliance and has warned of growing risks related to fraud and speculative trading [3].

Market reactions have been mixed. While some companies have shown enthusiasm by applying for licenses, regulators caution that misleading claims and unsubstantiated promotions have already emerged. SFC Executive Director Yip Chi-hang emphasized the need for investors to maintain rational judgment and avoid being swayed by short-term price volatility or speculative hype [3]. Several stablecoin firms in the region have reported double-digit losses in the immediate aftermath of the regulation’s enforcement [7].

Despite the regulatory push, there has been no significant increase in virtual asset-related complaints, with 265 reported cases in the first half of 2025. However, the SFC has noted that existing complaints often involve serious issues such as fraud, theft due to platform breaches, and money laundering allegations [3]. Regulators continue to stress that investing in unregulated platforms carries substantial risks, comparing such activities to “Russian roulette” for investors [3].

Several firms have already responded to the new landscape. CMB International, a subsidiary of China Merchants Bank, launched what is believed to be the first licensed cryptocurrency exchange in Hong Kong [6]. Meanwhile, Anchorpoint, a joint venture between Animoca Brands, Standard Chartered, and Hong Kong Telecom, has applied for a stablecoin issuer license and is testing its initiatives within the Hong Kong Monetary Authority’s regulatory sandbox [10].

The SFC and the Hong Kong Monetary Authority have stated their commitment to fostering a safe and transparent environment for stablecoin activities while supporting innovation in the digital asset space [3]. As the regulatory environment matures, the city is positioning itself as a key player in the development of stablecoins, particularly in the context of cross-border payments and potential yuan-based alternatives [9]. Companies that demonstrate compliance with the new rules are expected to gain a competitive advantage in an increasingly regulated and competitive market [3].

[1] Hong Kong Regulator Warns of Stablecoin Scam Risks (https://www.livebitcoinnews.com/hong-kong-regulator-warns-of-stablecoin-scam-risks/)

[2] Hong Kong warns of fraud risk after new stablecoin rules (https://www.tradingview.com/news/cointelegraph:9d91ec865094b:0-hong-kong-warns-of-fraud-risk-after-new-stablecoin-rules/)

[3] Hong Kong Securities and Futures Commission: The risk of (https://news.futunn.com/en/post/60726016/hong-kong-securities-and-futures-commission-the-risk-of-fraud)

[6] China Merchants Bank subsidiary launches crypto (https://www.tradingview.com/news/cointelegraph:8fc7dc2b9094b:0-china-merchants-bank-subsidiary-launches-crypto-exchange-in-hong-kong/)

[9] Stablecoins: Latest News and Updates (https://www.scmp.com/topics/stablecoins)

[10] Animoca, Standard Chartered, and HKT Form Joint (https://cryptorank.io/news/feed/0cc77-animoca-standard-chartered-hong-kong-stablecoin-license)