Hong Kong to criminalize unlicensed stablecoin promotions from Aug

Starting August 1, 2025, Hong Kong will criminalize the promotion and issuance of unlicensed stablecoins under the newly enacted Stablecoins Ordinance, marking a significant regulatory milestone in the digital asset space.

This comprehensive legislation requires that all issuers of fiat-referenced stablecoins—digital currencies pegged to traditional fiat currencies like the Hong Kong dollar, US dollar, or euro—must obtain a license from the Hong Kong Monetary Authority (HKMA) to operate legally within the city.

The ordinance stems from Hong Kong’s commitment to strengthening investor protection, market integrity, and financial stability in its growing virtual asset ecosystem. Under the new regime, unlicensed promotion, distribution, or offering of stablecoins to retail investors will constitute a criminal offense, punishable by fines up to HK$50,000 (approximately US$6,300) and imprisonment for up to six months.

This crackdown highly discourages unauthorized issuers and aims to reduce fraud, excessive risk-taking, and unreliable market hype associated with unregulated stablecoin activities.

Issuers seeking licenses must meet stringent requirements including sufficient financial resources, ensuring full backing of stablecoins with reserve assets equal to their circulation value, and implementing robust risk management and redemption guarantees.

Furthermore, the HKMA’s licensing process will be invitation-based, engaging applicants early to ensure only credible entities enter the market.

This well-defined regulatory framework aligns Hong Kong with global efforts to impose “same activity, same risks, same regulation” principles for stablecoins, promising to enhance the city’s role as an international financial center and foster innovation in the digital economy.

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