Hong Kong's stablecoin regulatory framework accelerates implementation, with the first batch of licenses expected to be issued in early 2026.

Hong Kong's stablecoin regulation is entering a substantial phase. With the relevant regulations for stablecoins set to take effect on August 1, 2025, the Hong Kong Monetary Authority recently released a series of accompanying regulatory documents, establishing a comprehensive regulatory framework. This set of guidelines not only provides the market with a clear application pathway and compliance standards but also reflects Hong Kong's intention to reserve policy space for the innovative development of stablecoins while strengthening risk prevention.

First Batch of License Issuance Time and Transition Arrangement

The Monetary Authority stated that licensing will be an ongoing process, encouraging well-prepared institutions to submit applications by September 30. The first batch of licensed stablecoin issuers is expected to be announced in early 2026, focusing on cross-border trade and Web3 applications. Only a few licenses will be issued in the first phase, with higher thresholds.

For fiat stablecoin issuers that already have substantial business in Hong Kong, a 6-month transition period has been set until January 31, 2026. These issuers must submit applications and relevant documents by October 31, 2025. Those who successfully submit and are confirmed can continue operations until January 31, 2026. Issuers who fail to complete the application on time or are rejected will have one month to exit their business in an orderly manner.

Risk Management and Anti-Money Laundering Requirements

In terms of risk management, licensed stablecoin issuers can only issue fiat stablecoins through recognized service providers. Custodial assets must be strictly segregated from proprietary assets, and reserve asset management policies and audit results must be disclosed regularly. Additionally, technical measures such as multi-signature must be employed to enhance security.

In terms of anti-money laundering, it is required to conduct risk assessments, customer due diligence, and ongoing monitoring. Licensed issuers must identify and verify the identities of stablecoin holders, and customers must complete a full due diligence process.

Reserve Assets and Multi-Currency Stablecoins

All issued stablecoins must be fully backed by assets, and eligible reserve assets include cash, bank deposits, bonds, and other high-quality liquid assets. The Monetary Authority will implement differentiated regulatory requirements based on the types of reserve assets. Licensees may issue stablecoins pegged to different fiat currencies, but approval is required.

Reserve assets can be custodied overseas or managed by third-party investment managers, but transparency and security must be ensured. Licensees are not allowed to pay interest on stablecoins and must establish an efficient and transparent issuance and redemption mechanism.

Application Requirements

Applicants must be a legal entity established in Hong Kong or overseas, and set up a substantial operational base in Hong Kong. They must maintain a paid-up capital of no less than 25 million HKD and submit documents such as a business plan and financial budget. Executives must have relevant experience and reside in Hong Kong.

Currently, multiple institutions have expressed their intention to apply, including technology companies and financial institutions. The industry expects that the first batch may issue 3-4 licenses, with a total not exceeding 10. Hong Kong is working hard to create a safe and compliant stablecoin market environment, leaving room for innovative development.