The legislative process for Hong Kong's (Stablecoin Ordinance) lasted over three years, from policy formulation to official implementation, reflecting Hong Kong's systematic layout for stablecoin regulation. Its core milestones can be summarized in the following four stages:
1. Policy Preparation Period (January 2022 — June 2023)
- January 2022: The Hong Kong Monetary Authority published the first (Discussion Paper on Crypto Assets and Stablecoins), initiating an assessment of industry risks and regulatory needs.
- October 2022: The Hong Kong government issued (Policy Declaration on Virtual Asset Development), clearly expressing the intention to include stablecoins in the regulatory framework for the first time.
- January 2023: The Monetary Authority released a consultation summary, establishing a 'risk-based' regulatory direction, emphasizing the need for legislation to regulate stablecoin issuance.
- June 2023: Hong Kong implemented (Licensing System for Virtual Asset Trading Platforms), laying the foundation for subsequent stablecoin regulation.
2. Public Consultation and Sandbox Pilot (December 2023 — July 2024)
- December 2023 — February 2024: Conducted public consultation, receiving 108 submissions focused on reserve asset transparency, redemption mechanisms, and anti-money laundering requirements.
- March 2024: The Monetary Authority launched the 'Stablecoin Issuer Sandbox Program' to attract institutions like Standard Chartered Bank, JD Technology, and Hong Kong Telecom to participate in testing cross-border payments and tokenization applications.
- July 2024:
- The Financial Services and Treasury Bureau and the Monetary Authority jointly released a consultation summary, clarifying the core principles of the legislative framework;
- Announced the list of first batch of sandbox participants, promoting technological compliance verification.
3. Progress of the Legislative Process (December 2024 — May 2025)
- December 2024:
- December 3: The Chief Executive directed submission to the Legislative Council (Stablecoin Ordinance Draft);
- December 6: The draft was published in the Gazette;
- December 18: The first reading in the Legislative Council.
- January 2025:
- The Internal Affairs Committee and the Bill Committee reviewed the draft, refining licensing conditions and penalty mechanisms.
- May 2025:
- May 19: The Legislative Council debated the draft, focusing on extraterritorial effects and transition arrangements;
- May 21: The Legislative Council passed the draft in the third reading.
- May 30, 2025: The ordinance was published in the Gazette, completing the legislative process.
4. Official Implementation (June 2025 — August 2025)
- June 6, 2025: The government published in the Gazette (Stablecoin Ordinance (Effective Date) announcement), designating August 1, 2025, as the official implementation date.
- Transition Arrangements:
- Existing issuers must submit license applications within 3 months after the effective date and can operate temporarily for 6 months;
- Those without a license must cease operations, with violators facing up to 7 years in prison and fines of up to 5 million HKD.
Core Significance
This ordinance is the **first comprehensive legislation globally targeting fiat-backed stablecoins, balancing innovation and risk through rules such as licensing systems, 100% reserve asset coverage, and mandatory redemptions. Its implementation marks a key step in Hong Kong's transformation from a traditional financial center to a 'digital asset hub', also reserving space for offshore RMB stablecoin exploration.