Hong Kong is preparing to implement its long-anticipated stablecoin licensing framework on August 1, 2025, as part of its broader push to become a global hub for regulated digital finance. However, according to local financial authorities, only a small number of licenses are expected to be approved this year, likely staying in the single digits.
Limited Stablecoin Licenses Expected in Initial Phase
In a recent interview with Christopher Hui, Secretary for Financial Services and the Treasury, it was revealed that stablecoin licenses may be issued before the end of 2025, but the rollout will be selective and cautious. This controlled approach ensures that only credible and well-prepared applicants will be approved under the upcoming regime.
Hui emphasized that the government’s goal is to address real-world economic challenges, particularly in the cross-border payments sector, where stablecoins have the potential to reduce costs and improve efficiency—especially in regions where local currencies are volatile or where the financial system lacks maturity.
Use of Offshore Yuan-Pegged Stablecoins Under Discussion
While the licensing program initially targeted stablecoins pegged to the Hong Kong dollar, industry attention is rapidly shifting toward the possibility of offshore yuan-backed stablecoins. Major Chinese firms like JD.com and Ant Group have reportedly been lobbying for approval of such instruments, which could enhance China’s cross-border payment infrastructure without breaching mainland restrictions.
Hui clarified that any stablecoin involving foreign currency backing will require coordination with the respective jurisdictions, highlighting the importance of exchange rate stability and systemic risk management in these cases.
Regulatory Framework Supports Legal Tender-Backed Tokens
Under the proposed rules, stablecoin issuers are allowed to back their tokens with recognized legal tender, though no currency has been explicitly restricted. This flexibility enables multi-currency stablecoin projects, provided they meet the compliance standards and risk assessments set by Hong Kong regulators.
The Hong Kong Monetary Authority has already piloted a stablecoin sandbox program, with participation from key players such as Standard Chartered, Animoca Brands, and JD Coinlink, laying the foundation for a compliant and scalable stablecoin ecosystem.
Outlook
As global regulation of stablecoins evolves, Hong Kong is positioning itself as a regulated, crypto-friendly jurisdiction. With its stablecoin licensing regime going live in August, the city aims to attract trusted issuers while maintaining financial stability and international cooperation.
Disclaimer
This content is for informational purposes only and does not constitute financial, investment, or legal advice. Cryptocurrency trading involves risk and may result in financial loss.