Hong Kong’s Financial Services and the Treasury Bureau (FSTB) and the Hong Kong Monetary Authority (HKMA) have unveiled a new regulatory framework for stablecoin issuers, following broad public support and stakeholder feedback.
On July 17, these financial institutions released their conclusions on establishing local legislation for stablecoin-related activities. This follows a two-month public consultation period that ended in February, receiving 108 submissions from market participants, industry associations, and professional organizations.
Most respondents agreed that a regulatory regime is necessary for fiat–referenced stablecoin (FRS) issuers to manage potential monetary and financial stability risks while ensuring transparent and effective oversight.
General Support and Recommendations
The proposed regulatory requirements and implementation plans received general support from respondents, along with additional suggestions.
Christopher Hui, the Secretary for the FSTB, highlighted that the new licensing regime for FRS issuers would complement existing regulatory measures for virtual asset (VA) trading platforms. Hui stated that this would “further strengthen” Hong Kong’s VA regulatory framework in line with international standards and help mitigate financial stability risks associated with stablecoin issuance.
Summary Review: The new stablecoin licensing regime introduced by Hong Kong’s FSTB and HKMA marks a significant step toward regulating the stablecoin market. This framework aims to address potential monetary and financial stability risks while ensuring transparent oversight. The broad support from stakeholders during the consultation period highlights the industry’s readiness for such regulations. By aligning with international standards, the new licensing regime not only strengthens Hong Kong’s virtual asset regulatory framework but also positions the region as a leader in the evolving digital finance landscape.
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