Hong Kong Sets $25 Million Capital Requirement for Stablecoin Issuers

The Hong Kong Monetary Authority (HKMA) has recently outlined the requirements for obtaining a license to issue stablecoins backed by the Hong Kong dollar (HKD). This move is part of the region's efforts to foster the robust and sustainable development of stablecoins, following the passage of the Stablecoins Ordinance by the Legislative Council in May 2025. The ordinance established a licensing regime for fiat-referenced stablecoin issuers, aiming to provide a clear regulatory framework for the issuance and management of stablecoins.

The HKMA's requirements for stablecoin issuers are designed to ensure the stability and reliability of HKD-backed assets. Applicants must demonstrate a strong financial position, robust risk management practices, and a commitment to transparency and compliance. The regulatory body has emphasized the importance of maintaining adequate reserves to back the stablecoins, ensuring that they can be redeemed at par with the HKD at any time. Additionally, issuers must implement stringent security measures to protect against cyber threats and ensure the integrity of their systems.

According to HKMA Chief Executive, Eddie Yue, applicants will need to fulfill several key requirements to register for a stablecoin issuer license. These include proposing specific and implementable business plans, demonstrating practical scenarios for application, and showcasing strong reserve management capabilities. Applicants must have a capital reserve of at least $25 million HKD and prove their ability to continue operating. However, if the applicant is an “authorized institution” such as a bank, the $25 million HKD capital requirement can be exempted.

Yue also clarified that participation in the government’s “sandbox program” is not a prerequisite for obtaining a license, nor does it guarantee that firms taking part in it will receive licenses. The sandbox program, which includes major players such as JD CoinChain Technology, Yuanbi Innovation Technology, and a consortium consisting of Ant Group, Standard Chartered and Hong Kong Telecom through Animoca Brands, has allowed institutions to test their respective stablecoin issuance processes and business models in a controlled environment. So far, there are more than 40 applications taking part in the sandbox program.

The HKMA's guidelines also highlight the need for issuers to have a clear and comprehensive governance structure, with a board of directors that includes individuals with relevant expertise in finance, technology, and regulatory compliance. Issuers must also establish a mechanism for regular audits and reporting to ensure ongoing compliance with the regulatory requirements. The HKMA has stated that it will closely monitor the activities of licensed issuers and take enforcement action if necessary to protect the interests of users and maintain the stability of the financial system.

The introduction of these licensing requirements is expected to attract more issuers to the region, as it provides a clear and transparent regulatory framework for the issuance of stablecoins. This, in turn, is likely to foster innovation and competition in the stablecoin market, benefiting users and the broader financial ecosystem. The HKMA's proactive approach to regulating stablecoins is a positive development for the region, as it demonstrates a commitment to promoting the responsible use of digital assets while safeguarding the stability of the financial system.