Hong Kong’s Legislative Council today passed the Stablecoin Bill, a landmark move that establishes a regulated framework for stablecoins and positions the region as a potential global hub for digital assets and Web3 innovation.
The bill successfully cleared its third reading, the final legislative hurdle, according to Legislative Council member Johnny Ng Kit-Chong, who announced the news on X. Ng stated that major institutions are expected to be able to apply to the Hong Kong Monetary Authority for stablecoin issuer licenses by the end of this year.
Under the new legislation, stablecoins issued in Hong Kong must be fully backed by fiat currency. Ng extended an open invitation to global enterprises and institutions interested in issuing stablecoins to apply in Hong Kong, offering his personal assistance in facilitating connections and collaborations for Web3 development in Asia and worldwide, with Hong Kong at the forefront.
Ng emphasized that this legislation is the crucial first step towards building robust Web3 infrastructure in Hong Kong, with the next critical phase being the development of more real-world applications. He highlighted stablecoin adoption’s potential to drive innovation in retail payments, cross-border trade, and peer-to-peer transactions, calling stablecoins a “major financial innovation.”
To enhance market stability and competitiveness, Ng suggested distributing interest earnings to stablecoin holders. This approach, he explained, would incentivize broader participation and expand stablecoin market share, supporting sustainable growth within the ecosystem. His remarks align with recent data showing a significant surge in yield-bearing stablecoins, which have grown to $11 billion in circulation, representing 4.5% of the total stablecoin market, up from $1.5 billion and 1% at the start of 2024.
