Amid Circle’s IPO Success in the US, Hong Kong Gears Up with Stablecoin Regulation

The Hong Kong Monetary Authority (HKMA) has confirmed that it will implement the Stablecoin Ordinance on 1 August 2025. This law will allow fiat-pegged stablecoin issuers to apply for licences in the territory.

The confirmation followed the successful public listing of USDC issuer Circle in the United States. Its stock market debut demonstrated the potential for stablecoin adoption in traditional financial systems.

Hong Kong’s New Stablecoin Regulation

According to a report by the Fintech News Network, the Stablecoin Ordinance was passed by the city’s Legislative Council in May 2025. The framework is designed to strengthen the digital asset regulations of the jurisdiction.

It also gives legal recognition to stablecoins by formally defining them within the financial regulatory framework.

“A stablecoin is not an investment vehicle, but rather a blockchain-based means of payment. By nature, it has no room for appreciation,” said Eddie Yue, Chief Executive of the HKMA.

The regulator is currently conducting an industry consultation on the implementation guidelines. It will begin accepting licence applications once the Ordinance comes into force. Yue confirmed that “only a handful of licences will be granted initially.”

“Applicants must demonstrate viable use cases and the ability to operate in a prudent and sustainable manner, as well as command the trust of market participants,” he added.

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The HKMA noted that its approach to stablecoin regulation is in line with international standards. Its key focus is risk management—particularly in the areas of reserve asset protection, price stability, redemption processes, and anti-money laundering.

Companies must show strong governance, the ability to maintain stable value, clear use cases, secure technology, and financial and operational strength.

Asian Dragon Taming Crypto

Meanwhile, Hong Kong’s regulators are not only focused on stablecoins. The Securities and Futures Commission (SFC), which oversees the wider financial market, has proposed allowing crypto derivatives trading for professional investors.

The move is part of a broader push to expand the range of crypto-related services in the city, first outlined earlier this year. The SFC has already authorised crypto staking services and approved two platforms to offer them.

In addition, the SFC has introduced a simplified licensing system for crypto trading platforms. The new framework replaces the earlier two-stage evaluation with a single, full external assessment.