Hong Kong Stablecoins Ordinance in Operation on 1 August 2025

On 21 May 2025, the Hong Kong Legislative Council passed the highly anticipated Stablecoins Bill, establishing a licensing regime for fiat-referenced stablecoin (FRS) issuers. This development reinforces Hong Kong’s position as a leading international financial centre for virtual assets as the Hong Kong government moves forward with plans to launch consultations on virtual asset over-the-counter and custodian services in 2025.

On 6 June 2025, the Hong Kong Government published a Notice that the Stablecoins Ordinance that the Stablecoins Ordinance (Cap. 656) will come into operation on 1 August 2025.

Key requirements of the Stablecoins Ordinance for licensees:

• Licensing: Any person or entity, who issues an FRS in Hong Kong or issues an FRS that purports to maintain a stable value with reference to Hong Kong dollars in or outside Hong Kong, will need to obtain a licence from the Monetary Authority (HKMA).
• Incorporation and capital: Licensees must be companies or authorised institutions incorporated outside Hong Kong with a minimum of HKD 25 million (or its equivalent in another currency) in paid-up share capital or other financial resources as approved by the HKMA.
• Reserve assets management: Each type of stablecoin issued must be backed by high quality and highly liquid reserve assets, segregated from any other pool of reserve assets maintained by the licensee.  The market value of the specified reserve asset must at all times be at least equal to the par value of the outstanding stablecoins of the type in circulation.
• Redemption rights: Licensees must provide each stablecoin holder with the right to redeem and must not impose any conditions that are unduly burdensome or unreasonable fees.
• Risk management: Adequate frameworks and internal controls must be in place to address operational, financial, technological, and compliance risks.
• Disclosure and governance: Issuers must provide transparent information on each stablecoin issued, including a white paper, and obtain HKMA’s prior consent for key personnel appointments.

Implications for business:

• Market access: Licensed issuers can offer stablecoins to retail investors, encouraging broader participation.  Mainland institutions are expected to roll out tokenised real-world assets (RWA) in the city.
• Compliance costs: Companies should anticipate higher compliance costs, particularly for anti-money laundering, cybersecurity, and governance.

For more information on the Stablecoins law and financial regulations on virtual assets in Hong Kong, contact your CMS client partner or these CMS experts: