Hong Kong Finalizes Stablecoin Licensing Framework for August 2025

Hong Kong has finalized a comprehensive licensing framework for stablecoin issuers, marking a significant milestone in the region's approach to digital assets. The new regulatory regime, approved by the Legislative Council, will become fully operational on August 1, 2025. This initiative aims to integrate stablecoins into the existing financial infrastructure while maintaining investor protection and regulatory clarity [1].

The Hong Kong Monetary Authority (HKMA) has been entrusted with overseeing the licensing and supervision of stablecoin issuers under this framework. While the regulation does not grant legal tender status to stablecoins, it significantly enhances their legitimacy within the financial system, fostering greater institutional and retail confidence [2]. The move reflects Hong Kong’s broader ambition to position itself as a global center for financial innovation, particularly in the digital asset space.

The regulatory impact is most immediately felt by major stablecoins such as USDC and USDT, which will now require compliance with the new licensing requirements to continue operating in the Hong Kong market. The policy is expected to promote transparency and stability, particularly for stablecoins pegged to the Hong Kong dollar and U.S. dollar. However, it may also pose challenges for unlicensed issuers, who will need to adapt or exit the market [3].

The licensing process is expected to begin in early 2026, with the HKMA encouraging interested parties to reach out for guidance. The first licenses are anticipated to be issued by that time, with the regulatory environment favoring financial institutions that already have robust compliance infrastructures [3]. This has led to speculation that traditional banks may have an advantage in securing licenses over crypto-native firms.

The regulatory shift aligns with the Basel Committee’s broader crypto risk framework, which will come into effect on January 1, 2026. Under these rules, stablecoins are assigned a 1250% risk weighting, meaning banks must hold substantial capital reserves for every stablecoin they hold. This has sparked concerns in the industry that such high capital requirements may stifle innovation and limit the potential for tokenized assets. However, Hong Kong’s licensing regime is seen as a balanced approach to managing these risks while promoting regulated participation [3].

The government’s approach is also viewed as a strategic move to support the internationalization of the yuan. By allowing only licensed issuers to operate, Hong Kong aims to ensure that all stablecoin activity is conducted under strict oversight, which could enhance trust among users and institutional investors [4]. This aligns with global regulatory best practices and could serve as a model for other jurisdictions.

The new framework is expected to drive liquidity towards licensed platforms, potentially increasing the appeal of stablecoins post-compliance. Insights suggest that past successes in licensing digital assets have led to increased institutional interest and market legitimacy, which may be replicated in this context [1].

Anchorpoint Financial, a consortium that includes Standard Chartered Bank, is among the leading contenders for one of the first stablecoin licenses. The involvement of major financial institutions underscores the convergence between traditional finance and digital assets in Hong Kong [3].

As the licensing process moves forward, the market will closely monitor how these regulations shape the digital asset ecosystem. The interplay between regulatory oversight and innovation will be a key determinant of Hong Kong’s long-term success in the stablecoin space [3].

Source: [1] Hong Kong Classifies Stablecoins as Legal Payment Tools ..., (https://www.ainvest.com/news/hong-kong-classifies-stablecoins-legal-payment-tools-boost-cross-border-efficiency-2508/)

[2] Why Hong Kong Is Driving RWA Tokenization Despite ..., (https://www.mitrade.com/insights/news/live-news/article-3-1070793-20250827)

[3] Hong Kong finalizes bank Basel crypto rules: to start 1 Jan ..., (https://www.ledgerinsights.com/hong-kong-finalizes-bank-basel-crypto-rules-to-start-1-jan-2026/)

[4] China eyes stablecoins to boost 'yuan internationalization', (https://coingeek.com/china-eyes-stablecoins-to-boost-yuan-internationalization/)