regulation
Hong Kong Proposes Stablecoin Licensing Framework
The HKMA and SFC outline new rules for fiat-referenced stablecoin issuers operating in Hong Kong.
The Hong Kong Monetary Authority (HKMA) has released a consultation paper on regulating fiat-referenced stablecoins, signalling the government’s intent to bring stablecoin issuance under formal oversight.
Key Proposals
The framework would require stablecoin issuers to:
- Maintain full reserve backing with high-quality liquid assets
- Obtain a licence from the HKMA
- Publish regular attestation reports
- Implement robust redemption mechanisms
Industry Response
Major players including Circle and local fintech firms have welcomed the clarity, though some note that compliance costs may favour established institutions.
Timeline
The consultation period runs through Q4 2025, with legislation expected in 2026.