Hong Kong Unveils Virtual Asset Policy, Boosts Stablecoin Regulation

Hong Kong's Financial Secretary, Paul Chan, has announced in the 2025-26 Budget that the city will soon release its second Virtual Asset Development Policy Statement. This statement aims to explore how to integrate the advantages of traditional financial services with technological innovation in the virtual asset space, enhancing the security and flexibility of real economic activities. The government also plans to encourage local and international businesses to explore the innovation and application of virtual asset technology.

In addition to the policy statement, the Hong Kong government has reiterated its commitment to consulting on the licensing regime for virtual asset over-the-counter trading and custody services within the year. This move is part of the government's ongoing efforts to regulate the virtual asset industry and promote its responsible development.

Regarding stablecoin regulation, the Hong Kong government has submitted a bill to the Legislative Council. Once the bill is passed, the Hong Kong Monetary Authority (HKMA) will be authorized to approve license applications for stablecoin-related services at the earliest opportunity. This step is a significant development in the government's efforts to provide a clear regulatory framework for stablecoins, which are a crucial component of the virtual asset ecosystem.

The release of the second Virtual Asset Development Policy Statement and the progress in stablecoin regulation demonstrate Hong Kong's commitment to fostering innovation and growth in the virtual asset industry. By combining the strengths of traditional financial services with technological advancements, Hong Kong aims to create a robust and secure environment for virtual asset activities, attracting both local and international businesses to explore and invest in the sector.