Cover Hong Kong’s new stablecoins ordinance, which came into effect on August 1, mandates that issuers of fiat-pegged cryptocurrencies must obtain a license from the Hong Kong Monetary Authority (Photo: Getty Images)
Hong Kong’s new stablecoins ordinance, which came into effect on August 1, mandates that issuers of fiat-pegged cryptocurrencies must obtain a license from the Hong Kong Monetary Authority (Photo: Getty Images)
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With its first-ever stablecoins law now in effect, the city is betting on regulation to lead Asia’s digital finance future
This month, a quiet but profound shift is taking place in Hong Kong’s financial sector—not on the trading floor, but on the blockchain. On August 1, the city’s Stablecoins Ordinance officially came into effect, marking a pivotal step in its strategy to become a global leader in digital assets.
Stablecoins function as digital counterparts to traditional currencies, engineered to maintain stable value by pegging them to fiat currencies—such as the Hong Kong or US dollar—or commodities like gold. This quality distinguishes them from volatile cryptocurrencies like Bitcoin. Used in activities from cross-border payments to digital trading platforms, these blockchain tokens promise faster transactions, lower costs and greater transparency.
Read more: What are stablecoins? An explainer to this relatively sane kind of cryptocurrency
Hong Kong’s bill to regulate stablecoins was passed in May and came into force just three months later, positioning the city ahead of the US in terms of regulatory rollout. America’s first federal framework for this cryptocurrency, the Genius Act, was passed by the Senate in June, after Circle—the issuer of USDC, the second-largest stablecoin by market value—went public in New York. Across the Atlantic, the European Union’s Markets in Crypto-Assets (MiCA) regulation has been in force since 2024.
The law in Hong Kong imposes strict licensing requirements on any company seeking to issue a fiat-referenced stablecoin (FRS) locally and internationally with a peg to its currency. Issuers must maintain fully backed reserves, implement robust stabilisation mechanisms and comply with anti-money laundering requirements. Applications to issue stablecoins opened the same day the law took effect.
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Above Hong Kong Monetary Authority chief executive Eddie Yue cautioned against undue speculation about the effects of stablecoins on the mainstream financial system, ahead of new legislation being enacted (Photo: Getty Images)
Hong Kong Monetary Authority chief executive Eddie Yue cautioned against undue speculation about the effects of stablecoins on the mainstream financial system, ahead of new legislation being enacted (Photo: Getty Images)
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“The purpose of establishing the regulatory regime is to properly manage the risks associated with stablecoin issuance,” the Hong Kong Monetary Authority (HKMA), the city’s central banking institution, tells Tatler by email. It is formulated to lay “a solid foundation to foster innovations and help promote the healthy, responsible and sustainable development of the stablecoin ecosystem in Hong Kong”, as well as to bring new opportunities to its economy and financial services sector.
“The ordinance in its current form leans more heavily towards investor protection,” Kristi Swartz, a partner at law firm DLA Piper, tells Tatler by email. That’s not surprising, she notes, given the licensed issuers’ ability to tap into the retail market, making transparency and reserve requirements especially important. She adds that the greater regulatory clarity now could help attract more players to the space. Still, she believes that future progress in fostering innovation under the ordinance will hinge on the HKMA’s willingness to engage with industry stakeholders as the ecosystem evolves.
The irony here is that Tether was originally created in Hong Kong. But it took a decade for stablecoins to move from start-up novelty to being central-bank-regulated
Henri Arslanian, the co-founder of crypto hedge fund Nine Blocks Capital and an adjunct professor at The University of Hong Kong, sees the moment as symbolic. “The irony here is that [the world’s largest stablecoin issuer] Tether was originally created in Hong Kong,” he says. “But it took a decade for stablecoins to move from start-up novelty to being central-bank-regulated. In a way, the funky teenager has grown up and is simply coming home.”
This past July, HKMA chief executive Eddie Yue warned against “undue speculation” regarding stablecoins’ impact on the mainstream financial system, adding that only “a handful” of licences will be initially granted. With its latest release of guidelines outlining details such as licensing procedures, anti-money-laundering and counter-terrorism financing requirements, the central banking authority encouraged potential issuers to apply by the end of September this year.
Read more: Bitcoin and the cryptocurrency problem: how to manage it effectively?
Why the Hong Kong dollar?
In 2024, the HKMA launched its Stablecoin Issuer Sandbox, allowing potential issuers to test their business models in a controlled environment. Three players emerged: fintech firm RD InnoTech; a heavyweight consortium comprising Web3 leader Animoca Brands, multinational bank Standard Chartered and telecom giant Hong Kong Telecom (HKT); and Jingdong Coinlink Technology Hong Kong, a subsidiary of Jingdong Technology Group, which is owned by the Chinese e-commerce company JD.com. All three plan to issue stablecoins pegged to the Hong Kong dollar—a notable decision in a market still dominated by US dollar-based tokens such as USDT and USDC.
For Rita Liu, the CEO of RD Technologies, which owns RD InnoTech, pegging to the Hong Kong dollar is the natural starting point. “First of all, we’re going to be regulated in Hong Kong, and we want to support Hong Kong’s ambition to become a Web3 hub,” she says. “We believe the Hong Kong dollar is quite an interesting currency because it’s pegged to the US dollar.”
First of all, we’re going to be regulated in Hong Kong, and we want to support Hong Kong’s ambition to become a Web3 hub
Evan Auyang, the group president of Animoca Brands, sees massive potential in Hong Kong dollar-backed stablecoins. One reason is Hong Kong’s status as a financial hub: in the first half of 2025, it reclaimed the top spot as the world’s leading IPO market, with listing volumes reaching US$14 billion, approximately eight times higher than the same period in the previous year.
Another key factor, Liu explains, is Hong Kong’s unique role as a bridge between mainland China and the rest of the world. Many B2B payment firms operate out of Hong Kong or Singapore, she notes, but often serve exporters and importers based in China. “Of course, the money flowing in and out of China needs to follow certain regulations and laws,” she says. “But from Hong Kong, you face the whole world.” With a legal framework now in place, she believes stablecoins can make cross-border trade and payments more efficient and cost-effective, reinforcing Hong Kong’s strength as a global conduit.
Evan Auyang, group president of Animoca Brands, sees huge potential for HK dollar-backed stablecoins thanks to the city’s financial hub status (Photo: Animoca Brands)
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Auyang further explains on demand from Chinese capital seeking international access: “Chinese-based assets always look for a capital window and, because the RMB is not convertible under the capital account, the only window is out of Hong Kong using Hong Kong’s capital system. If you look at the trillions of dollars of assets sitting in Hong Kong dollars—not to mention Hong Kong as a financial centre and a window of capital for mainland Chinese companies—you’re talking about tonnes of assets already coming into the international arena in a neutral way that isn’t necessarily denominated in the Swift system, which is US dollars. That’s huge potential.”
While all three sandbox participants are starting with the Hong Kong dollar, the ordinance itself is currency-agnostic. “The Hong Kong dollar is super important,” says Auyang. “But we are also going to be open-minded in talking about other currencies.”
The key to stablecoin adoption
To succeed, stablecoins must go beyond technical novelty—they need to prove their usefulness. Liu identifies three core use cases: international payments, trading digital assets and tokenising real-world assets such as property or fine art. In each of these scenarios, stablecoins act as the digital cash powering the transaction.
Auyang believes that stablecoins could enable users with less capital to access “a suite of global financial products” because of their decentralised nature. Traditional banks often exclude or deprioritise low-income customers due to minimum balance requirements. With stablecoins and crypto rails, he says these individuals may earn interest in real-time and transact globally, all without needing a conventional bank account.
Above Auyang believes both retail and enterprise demand could be key drivers for the adoption of stablecoins in Hong Kong (Photo: Getty Images)
Auyang believes both retail and enterprise demand could be key drivers for the adoption of stablecoins in Hong Kong (Photo: Getty Images)
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Beyond single users, enterprise demand will be crucial for boosting the adoption of stablecoin. “Retail is one part [of the potential use case]. But what you want to pursue are big flows [of transactions]. That’s how you gain adoption. So, you would definitely want to focus on enterprise-level solutions like the B2B type of flows; cross-border trade would be one of them,” he says.
But trust—not just technology—is what drives adoption at scale. Auyang says that is why for its stablecoin, it partnered with Standard Chartered and HKT, two trusted names in finance and consumer connectivity. “We didn’t go it alone,” Auyang says. “Whether or not there’s adoption really has to do with transparency and trust.
If this domicile is a first mover—which it really is—and it starts to go into other forms of currencies as well, it can really become a hub
“It is so, so important to Hong Kong to protect its status as a global financial hub. We have to go after this space. I don’t really just mean stablecoin—I mean like everything that is around tokenisation of assets, including crypto,” he says. “If this domicile is a first mover—which it really is—and it starts to go into other forms of currencies as well, it can really become a hub.”
As the new rulebook begins to guide the market, the real test begins. If stablecoins are to live up to their promise, they must now prove their worth in the real economy. The playbook is written, the players are in place—and the world is watching.
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Based in Hong Kong, editor Yoyo Chow covers the people and ideas redefining Asia’s future—from cutting-edge innovation and AI to bold moves in sustainability and diversity. She also drives content for Tatler Gen.T in Hong Kong, a platform and community spotlighting the region’s next generation of startup founders, creatives and changemakers.
Before that, she was a video journalist producing content for international TV and digital platforms, including Reuters and South China Morning Post. If you have a powerful story to share, she’s all ears. Send press materials, event invites and any inquiries to yoyo.chow@tatlerasia.com.
