Hello everyone, I am Penny.
The Hong Kong (Stablecoin Regulation) officially takes effect on August 1. Let's look at its key points and market impact:
1. Regulatory scope and licensing requirements
Applicable parties: All fiat stablecoin issuers operating in Hong Kong (such as USDT, USDC, HKD stablecoin).
Mandatory licensing: Issuers must apply for a license from the Hong Kong Monetary Authority (HKMA), otherwise they cannot provide services to Hong Kong users.
Exemption clause: Stablecoins issued by banks (such as HSBC HKD stablecoin) can simplify the approval process.
2. Asset reserves and transparency
100% reserve: Stablecoins must be 1:1 backed by cash or highly liquid assets (such as short-term government bonds), algorithmic stablecoins are prohibited.
Monthly audits: Issuers must publish reserve proof every month, and it must be audited by a licensed accounting firm.
User redemption rights: Must ensure instant redemption 24/7 to avoid 'run risk'.
3. Compliance operating requirements
Capital threshold: Issuers must maintain at least HKD 50 million in capital (or 2% of the circulating supply of equivalent stablecoins).
Anti-money laundering (AML): KYC, transaction monitoring must be performed, and suspicious transactions must be reported.
Prohibited activities: Reserve funds cannot be used for lending, investment, or paying interest.
4. Cross-border and cross-platform restrictions
Localized operations: Non-Hong Kong registered companies must establish a Hong Kong entity to apply for a license.
Interconnectivity: Allows for pilot integration with Hong Kong's 'Digital Hong Kong Dollar (e-HKD)', may expand to Greater Bay Area cross-border payments in the future.
5. Transition period arrangements
Grace period: Existing stablecoin issuers must complete compliance rectification by February 1, 2026, or they must exit the Hong Kong market.
New issuers: Submit from August 1, approval cycle approximately 3-6 months.
6. Impact on the market
✅ Positive impact:
Compliant stablecoin issuers (such as Circle, Paxos) will seize the Hong Kong market.
Institutional fund entry: Banks and brokers can legally use stablecoins for settlement (such as bond tokenization).
Rise of HKD stablecoins: Local projects in Hong Kong (such as ZA Bank's HKDC) may receive policy support.
⚠️ Challenges:
USDT may exit: If Tether does not apply for a license, Hong Kong users may not be able to trade.
Increased costs for small and medium platforms: Audit and compliance costs may eliminate some players.
7. Global significance
The first comprehensive stablecoin regulation in Asia, stricter than Singapore and clearer than the U.S.
Pilot RWA innovation: Compliant stablecoins may become payment tools for real estate and bond tokenization.