Hong Kong’s Stablecoin Licensing Rules Take Effect Amid Crypto Hub Ambitions

Hong Kong’s new regulations for stablecoin issuers officially took effect on Friday, marking a significant step in the city’s efforts to position itself as a leading crypto and Web3 hub in Asia. The rules, overseen by the Hong Kong Monetary Authority (HKMA), aim to create a structured licensing framework for companies issuing stablecoins — cryptocurrencies pegged to real-world assets like the U.S. dollar.

The regulatory move follows years of groundwork by the special administrative region, which introduced rules for cryptocurrency exchanges over two years ago and began consulting on stablecoin oversight in 2023. The law governing stablecoins was passed in May, allowing firms to submit license applications starting this week. According to HKMA guidance, applications will remain open for the next three months, with approved applicants permitted to operate while awaiting final decisions until January 31.

Interest in Hong Kong’s stablecoin licenses is high, with reports indicating that about 40 firms are preparing to apply. However, HKMA CEO Eddie Yue has cautioned that not all will succeed, noting last month that the market has become “overly excited” and predicting fewer than 10 approvals.

The rollout of the stablecoin framework underscores Hong Kong’s broader ambition to attract global crypto firms and reinforce its position as a gateway to Southeast Asia’s digital asset markets. With rising demand for regulated stablecoins and increased scrutiny worldwide, the city’s approach could serve as a model for balancing innovation and investor protection in the evolving cryptocurrency landscape.