Hong Kong Enters Global Competition with New Licensing Legislation for Stablecoins

Hong Kong recently enacted a bill concerning stablecoins, which will facilitate the implementation of a licensing framework for issuers of fiat-backed stablecoins within the territory.

According to Johnny Ng, a legislative council member, the stablecoins in this context are supported by fiat currency as their basis. He expressed an invitation for international companies and institutions interested in launching stablecoins to seek applications in Hong Kong.

By the end of this year, institutions are anticipated to have the opportunity to apply for a license through the Hong Kong Monetary Authority.

The initiative to develop a stablecoin framework in Hong Kong has been under consideration since 2023. Towards the end of that year, a consultation paper outlining stablecoin regulations was made public. Following that, the Stablecoin Bill was introduced, successfully passing its third reading in the Legislative Council, as mentioned in Ng’s statement.

In an effort to align with other countries establishing their own stablecoin frameworks, Hong Kong is adapting its regulations. The European Union began licensing stablecoin issuers last year after the approval of its comprehensive crypto legislation known as the Markets in Crypto Assets regulation (MiCa). In the U.S., a stablecoin bill is currently in progress in Congress, while the U.K. is actively seeking feedback on proposed legislation that could also impact stablecoin operations.

The sector of stablecoins has surged in popularity recently, attracting significant attention from both cryptocurrency and traditional financial firms. Ben Reynolds, who oversees stablecoins at BitGo, noted at Consensus 2025 that major banking institutions are increasingly realizing the potential risks to their market share posed by the emergence of digital currencies.