Key Highlights
- Hong Kong will start issuing licenses to stablecoin issuers under its Stablecoin Ordinance.
- Issuers must follow strict rules, including 100% reserve backing and having an office in Hong Kong.
- The country is preparing rules for crypto trading, asset management rules, and automatic crypto tax reporting starting in 2028.
Hong Kong is getting ready to officially authorize stablecoin companies. The Hong Kong Monetary Authority (HKMA) is preparing to formally authorize them under its newly implemented Stablecoin Ordinance. The regulator also confirmed that companies can now submit applications to operate legally.
The update was shared by the Secretary for Financial Services and the Treasury, Christopher Hui, during a Legislative Council briefing on Friday. Once approved, companies will be allowed to issue Hong Kong dollar–backed stablecoins under a regulated framework.
Clear rules for stablecoin issuers
The license comes with strict requirements to ensure the system remains safe for users. For instance, the issuer must always have all coins backed by real assets, such as cash and government securities. In addition, they must keep their assets separate from the company’s assets and hold them in a trust account.
Stablecoin holders can redeem their coins at face value without paying extra fees. Companies that have yet to get licensed must also have at least HK$25 million (roughly $3.3 million) in paid-up capital and a physical office in Hong Kong. They also must comply with strict anti-money laundering requirements.
Authorities confirmed that some applications are currently under review, and officials expect to start granting licenses in the first quarter of 2026. Officials say the process is cautious but designed to give businesses a clear roadmap while keeping investors safe.
Expanding crypto oversight
Hong Kong is also preparing to roll out rules for crypto trading platforms, as well as custody services, advisory services, and asset management. A law regarding these areas has already been drafted and will be submitted to the Legislative Council later this year.
The city is also planning to introduce automatic tax reporting for cryptocurrency transactions starting in 2028, following international rules set by the OECD. This would let authorities share transaction info across borders.
All of these changes in the Hong Kong crypto policies are in line with the country’s 15th Five-Year Plan, which is a strategic roadmap to guide the nation’s economic and social growth as it seeks to maintain its position as the global financial hub.
The changes are designed to protect consumers but also provide a pathway to allow the digital asset market to grow responsibly. Clear rules for reserves, redemption, and custody are meant to prevent market shocks, like those caused by algorithmic stablecoins in other countries.
As a result, Hong Kong is positioning itself as one of the few major financial centers with a clear and regulated path for stablecoin businesses.
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