Hong Kong’s financial regulator, the Hong Kong Monetary Authority (HKMA), has opened two key consultation papers—on AML/CFT requirements and licensing guidelines—as it prepares to implement a global-first regulatory regime under the recently gazetted Stablecoins Ordinance (Cap. 656). Stakeholders have until June 30, 2025 to provide feedback, ahead of the stablecoin licensing regime’s expected rollout on August 1 regulationtomorrow.com.
Under the new framework, any entity issuing fiat-referenced stablecoins—or marketing them in Hong Kong—must obtain an HKMA license. The AML/CFT consultation outlines requirements such as transaction monitoring, KYC for both issuers and redemption providers, and real-time suspicious activity reporting. The licensing guidelines further detail standards for reserves management, redemptions, and operational governance reuters.com.
Hong Kong’s regulatory philosophy emphasizes flexibility: though the initial framework regulates Hong Kong dollar–backed stablecoins, the HKMA can permit issuers to back coins in foreign currencies and holds discretion over reserve asset types—allowing, for instance, instruments with maturities of up to one year ledgerinsights.com.
But critics caution the regime may skew in favour of incumbents. Legal observers have stated that strict compliance thresholds and infrastructure requirements could limit entry for smaller fintechs, potentially reinforcing a status quo bias bankingriskandregulation.com.
As anticipation builds for Hong Kong’s stablecoin law to take effect, many consider the consultation window essential for shaping fair market entry and global competitiveness. Final guidelines are expected before August implementation, setting a global precedent for regulated fiat-stablecoin issuance.
