In the wave of rapid development of global financial technology, Hong Kong is reshaping its status as an international financial center with a series of pioneering measures. Between May and June 2025, the Hong Kong Legislative Council successively passed the Stablecoin Ordinance and published it in the government gazette, while the Hong Kong Securities and Futures Commission is considering introducing virtual asset derivative trading for professional investors. These two significant decisions mark a critical step for Hong Kong in the field of digital asset regulation and innovation, setting a new benchmark for global financial technology development.
Stablecoin legislation: Filling regulatory gaps and building a compliance framework
On May 30, 2025, the Hong Kong Special Administrative Region Government published the Stablecoin Ordinance in the government gazette, making it officially a law. This milestone move makes Hong Kong the first jurisdiction in the world to establish a comprehensive regulatory framework for 'fiat-backed stablecoins.' Prior to this, the Legislative Council had officially passed the ordinance draft on May 21, aimed at establishing a licensing system for issuers of 'fiat stablecoins,' promoting financial innovation while maintaining financial stability.
The core content of the Stablecoin Ordinance revolves around the licensing system and regulatory requirements. According to the ordinance, anyone issuing fiat stablecoins in Hong Kong or claiming to anchor the value of fiat stablecoins to HKD inside or outside Hong Kong must apply for a license from the Hong Kong Monetary Authority. This provision reflects the principle of 'same activity, same risk, same regulation' adhered to by Hong Kong regulators, ensuring that all activities related to HKD value claims are subject to regulatory oversight, regardless of the issuer's location. This principle of 'value anchoring regulation' is innovative on a global scale.
In terms of specific requirements, licensees must maintain a robust stablecoin mechanism, ensuring that reserve assets consist of high-quality and highly liquid assets, equal to the face value of the circulating fiat stablecoin, and properly segregated and safeguarded. Stablecoin holders have the right to redeem stablecoins at face value, and redemption requests must be processed within a reasonable time and without fees. In addition, licensees must comply with a series of requirements for anti-money laundering, risk management, disclosure regulations, and auditing, and conduct transactions on licensed virtual asset trading platforms.
The sandbox program for stablecoin issuers launched by the Hong Kong Monetary Authority provides a testing ground for the compliant development of stablecoins. Launched in March 2024, the sandbox program allows institutions wishing to issue stablecoins to test their operational plans and engage in two-way communication with regulatory authorities. The three groups of participants announced in July 2024 include JD CoinChain Technology, Yuan Coin Innovation Technology, and a consortium formed by Standard Chartered Hong Kong, Ant Group, and Hong Kong Telecom. These participants test the operational plans for HKD stablecoins in the sandbox, involving multiple scenarios such as cross-border payments, investment transactions, and retail payments, accumulating valuable experience for the formal implementation of stablecoins.
Virtual asset innovation: Enriching product types, expanding market boundaries
While advancing stablecoin legislation, Hong Kong's innovations in the virtual asset field are also accelerating. The Hong Kong Securities and Futures Commission is considering introducing virtual asset derivative trading for professional investors and developing robust risk management measures, which will further enrich the product options in the Hong Kong market, enhancing its status as a leading virtual asset market in Asia.
Looking back at the development history of the Hong Kong virtual asset market, in December 2022, the Securities and Futures Commission approved the first batch of virtual asset futures exchange-traded funds for retail investor trading; in April 2024, it approved Asia's first batch of virtual asset spot exchange-traded funds; and in July 2024, it approved Asia's first virtual asset futures reverse products. These measures have gradually improved the product system of the Hong Kong virtual asset market, providing investors with more diverse investment options.
In February 2025, the Securities and Futures Commission released the 'ASPIRe' roadmap, aimed at enhancing the safety, innovation, and growth of Hong Kong's virtual asset market. One of the key focuses of the roadmap is to expand the types of virtual asset products and services to meet the needs of different categories of investors while ensuring investor protection. Specific measures include allowing virtual asset pledge services in systems equipped with adequate safeguards, enabling investors to earn additional returns. In April 2025, the Commission issued regulatory guidelines regarding pledge services to licensed virtual asset trading platforms and virtual asset funds, allowing two licensed platforms to provide pledge services to clients, followed by two approved virtual asset spot ETFs updating their fund documents to participate in pledge activities.
In addition, the Financial Services and the Treasury Bureau will publish a second policy declaration on the development of virtual assets, outlining the next steps in policy vision and direction, including exploring how to combine the advantages of traditional financial services with technological innovations in the virtual asset field to improve the safety and flexibility of real economic activities, encouraging local and international enterprises to explore innovations and applications of virtual asset technology. In assisting fintech companies to expand their business, the Investment Promotion Unit is actively promoting in the Guangdong-Hong Kong-Macao Greater Bay Area, participating in large fintech events in the region, and connecting with local government departments and regulatory agencies to help Hong Kong fintech companies expand into the mainland market.
Balancing regulation and innovation: The global significance of the Hong Kong model
A series of measures taken by Hong Kong in the stablecoin and virtual asset sectors reflect its wisdom in seeking a balance between regulation and innovation. The introduction of the Stablecoin Ordinance fills the regulatory gap for fiat-pegged stablecoins, providing a clear compliance framework for the industry and reducing systemic risks, such as bank runs or fraud. At the same time, the launch of the sandbox program provides companies with space for innovative experiments, helping to cultivate a healthy stablecoin ecosystem.
In the virtual asset field, the gradual recognition of products and the release of roadmaps by the Hong Kong Securities and Futures Commission not only safeguard investor rights but also promote market innovation. The 'ASPIRe' roadmap and the forthcoming policy declaration further highlight the Hong Kong government's determination to promote sustainable development of the virtual asset market, aiming to establish Hong Kong as a leading virtual asset center in Asia.
Hong Kong's regulatory model has global relevance. Unlike the United States (GENIUS Act), which emphasizes the dominance of USD stablecoins, Hong Kong's Stablecoin Ordinance allows for pegging to multiple fiat currencies, reflecting a more open and inclusive attitude. This principle of 'value anchoring regulation' ensures regulatory effectiveness while providing development space for different types of stablecoins, helping to promote Hong Kong as a hub for diverse stablecoins.
In terms of virtual asset regulation, Hong Kong adopts the principle of 'same activity, same risk, same regulation,' which aligns with the regulatory guidelines set by the International Organization of Securities Commissions, ensuring consistency and effectiveness in regulation. At the same time, Hong Kong is actively promoting the integration of virtual assets with traditional finance, exploring the combination of virtual assets with RWA (Real World Assets), injecting new momentum into the development of virtual assets and promoting the cryptocurrency market to move from virtual to real.
Future outlook: Opportunities and challenges coexist
Hong Kong's innovative measures in the stablecoin and virtual asset sectors inject new vitality into its development as an international financial center. The compliance of stablecoins is expected to promote Hong Kong's role as an important hub for global stablecoin trading and issuance, especially with great potential in offshore RMB stablecoins, which will help advance the internationalization of the RMB and the development of offshore financial business.
The introduction of virtual asset derivatives and the continuous improvement of the product system will attract more professional investors and institutions to participate in the Hong Kong virtual asset market, enhancing Hong Kong's influence in the global virtual asset field. At the same time, the Hong Kong government is actively promoting the integration of financial technology with traditional finance, such as the application of artificial intelligence in the financial sector, which will further enhance the operational efficiency of Hong Kong's financial services industry and promote industrial upgrading and transformation.
However, challenges still exist. Stablecoin regulation may increase compliance costs for businesses, and how to find a balance between regulatory strictness and corporate competitiveness is an ongoing issue for Hong Kong legislators. Furthermore, in the global stablecoin market, USD stablecoins dominate, and HKD stablecoins need to enhance their competitiveness by creating unique trading scenarios, such as integrating with RWA (Real World Assets).
In the virtual asset field, achieving the best balance between protecting investors and promoting innovation is also a challenge faced by regulators. As the virtual asset market continues to develop, new risks and challenges may arise, and regulatory authorities need to remain flexible and forward-looking, timely adjusting regulatory policies to adapt to market changes.
Leading the global financial technology trend
Through the legislation of the Stablecoin Ordinance and innovative measures in the virtual asset field, Hong Kong is writing a new chapter in global financial technology development. From the compliance framework for stablecoins to the diversification of virtual asset products, from the innovative experiments of regulatory sandboxes to deep integration with traditional finance, Hong Kong is embracing the opportunities and challenges of the digital economy era with an open, inclusive, and prudent attitude.
In the context of profound changes in the global financial landscape, Hong Kong's exploration provides valuable experience for other countries and regions. By balancing regulation and innovation, Hong Kong is expected to reshape its status as an international financial center, becoming a bridge connecting traditional finance and digital finance, leading the new trend of global financial technology development. In the future, as various policies and measures are gradually implemented, Hong Kong's potential in the stablecoin and virtual asset sectors will be further released, contributing 'Hong Kong wisdom' and 'Hong Kong solutions' to global financial innovation.