On August 1, 2025, Hong Kong's (Stablecoin Regulation) officially landed. This is the world's first comprehensive regulatory framework specifically targeting fiat stablecoins, aimed at addressing the risks of runs, credit, and systemic risks — after all, the aftermath of the TerraUSD collapse in 2022 still lingers in the market's mind.
What red lines have these new regulations drawn? How will they reshape the stablecoin market? 1. Who needs to be regulated? — Both domestic and foreign issuers of Hong Kong dollar stablecoins must obtain a license. The regulations clearly state: regardless of whether the issuing entity is in Hong Kong or not, as long as they issue a stablecoin 'pegged to the Hong Kong dollar' or issue any fiat stablecoin within Hong Kong, they must apply for a license from the Hong Kong Financial Management Commissioner.
This means:
In the future, stablecoins used in Hong Kong will first check for a 'Hong Kong license';
Foreign institutions wishing to issue 'Hong Kong dollar stablecoins'? They must also comply with Hong Kong regulations.
2. When will the first batch of licenses be issued? — The application deadline is September 30, and these 3 are most likely.
Timeline: The first round of applications closes on September 30, 2025, with the first batch of licenses expected to be issued in early 2026.
Popular candidates: JD Coin Chain, Yuan Coin Technology, a consortium led by Standard Chartered Bank, these 3 have passed the sandbox test by the Monetary Authority and are seen as 'seed players' in the industry.
Their strategic directions vary: JD Coin Chain targets cross-border trade settlements, Yuan Coin Technology focuses on payment scenarios, while the Standard Chartered consortium leverages traditional financial resource advantages.
3. Six major compliance iron rules: blocking risk loopholes from the source
The regulations have imposed strict 'tight restraints' on licensed institutions, each clause directly addresses the core risks of stablecoins:
Reserve assets must be 'fully backed'
The issuance scale of stablecoins must be 100% supported by high-quality liquid assets (such as cash, bank deposits maturing within 3 months), and must be strictly isolated from the issuer's own assets — completely eliminating the manipulation of 'watered-down reserve assets' seen in TerraUSD.
Simply put: if issuing 100 million stablecoins, there must be an equivalent 100 million assets held in a custody account.Redemption right 'Instant cash at face value'
Holders can redeem fiat currency at a 1:1 ratio at any time, and the issuer must process it within 1 business day without unreasonable fees. This effectively provides users with an 'emergency escape route' to avoid the crisis of being unable to withdraw during a bank run.Must 'set roots' in Hong Kong
Licensed institutions must either be local Hong Kong companies or recognized foreign financial institutions (such as banks), ensuring that regulation can be 'visible and manageable'.HKD 25 million 'threshold fee'
Initial capital of no less than HKD 25 million, which is not considered high but can filter out underpowered 'sham teams'.Key personnel 'background checks for three generations'
Controlling shareholders, directors, and other core personnel must pass strict background checks, including fraud records and professional qualifications.Anti-money laundering + third-party audit 'double insurance'
A comprehensive risk management system must be established, particularly to prevent money laundering and terrorist financing; simultaneously, a third-party audit must be introduced to periodically disclose reserve asset conditions for market supervision.
4. Who can sell stablecoins? — Only these four types of institutions are qualified.
Retail investors wishing to buy compliant stablecoins can only do so through designated channels:
Licensed stablecoin issuers;
Virtual asset trading platforms licensed by the Hong Kong Securities and Futures Commission;
Licensed brokerages like Guotai Junan International;
Local banks in Hong Kong.
Any sale of stablecoins by non-designated institutions will be considered a violation.
Stablecoins are entering a 'compliance race', and Hong Kong aims to seize global discourse power.
The ambitions of this set of regulations are clear: to eliminate the market's trust crisis in stablecoins with strict rules while competing for Hong Kong's position as the 'global regulatory benchmark for stablecoins'. For users, 'Hong Kong license' will become an important safety label when choosing stablecoins in the future; for institutions, obtaining a license not only allows for legal operation but also seizes early opportunities in new scenarios such as cross-border payments and asset settlements.
As for whether the tragedy like Terra can be completely avoided? At least from a regulatory perspective, Hong Kong has plugged the most critical loophole. The rest depends on how the market practices this.
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