Hong Kong is working to incorporate stablecoins into the region's legal framework to regulate digital assets.
Before officially becoming law, the draft will undergo three rounds of rigorous review, including debates, deliberations, and necessary revisions. Once it passes the final assessment, the bill will be submitted to the Chief Executive of the Hong Kong Special Administrative Region for signing into law.
Before officially becoming law, the draft will undergo three rounds of rigorous review, including debates, deliberations, and necessary revisions. Once it passes the final assessment, the bill will be submitted to the Chief Executive of the Hong Kong Special Administrative Region for signing into law.
The draft will undergo three rounds of rigorous review, including debates, reviews, and necessary amendments.
The bill primarily focuses on three main pillars: issuer licensing regulations, stablecoin issuance processes, user protection measures, and marketing guidelines. After the legislation is enacted, any organization wishing to issue stablecoins in Hong Kong must obtain a license from the Hong Kong Monetary Authority (HKMA). To qualify, issuers must meet strict requirements regarding capacity, reserve assets, and price stability mechanisms.
The bill may bring transformative changes to the market, similar to the impact of the European MiCA regulation. According to a report by research firm Kaiko and exchange Bitvavo on December 18, MiCA has significantly reshaped the landscape of stablecoins in Europe. While issuers like Tether have exited the euro-denominated stablecoin issuance, organizations compliant with MiCA are thriving. By November 2024, three entities—Circle, Société Générale, and Banking Circle—will hold 91% of the compliant stablecoin market share.
