Hong Kong’s Stablecoin Law Goes Live August 1 – Crypto’s Next Big Regulatory Test

Hong Kong throws open the regulatory gates for stablecoins—just as global markets start sweating over algorithmic pegs.

The lowdown: Starting August 1, every dollar-pegged token circulating in the city must comply with strict new licensing rules. No more fly-by-night operators—the Hong Kong Monetary Authority means business.

Why it matters: This isn’t just local housekeeping. As China’s financial sandbox, Hong Kong’s move telegraphs how Asian regulators might tame the stablecoin wild west. Expect exchanges to scramble—compliance costs will weed out the weak hands.

The kicker? Banks are already whispering about ‘approved stablecoin’ trading desks. Because nothing ushers in decentralization like requiring permission first.

Chan says it is essential to explore digital finance in the real economy

Chan said financial innovation was where Hong Kong must win in order for the city to become a financial powerhouse. He added that it was essential to explore ways of utilizing digital finance to better support the real economy’s development, including in finance and cross-border financial services.

Chan explained that the convergence of Web3 and AI was unlocking new frontiers in finance. Decentralized AI algorithms enhanced credit assessments, audited smart contracts more precisely, and delivered personalized investment strategies. Beyond finance, the technology streamlined supply chains transformed healthcare data management, and created new immersive gaming experiences. Web3 and AI were transforming businesses and public services, driving innovation and efficiency at every turn.

“We will unveil a second policy statement on the development of virtual assets. It will cover how to make use of Web3 to fast-track the development of traditional financial services, empower the real economy, and strengthen the application of digital asset technologies.”

–Paul Chan, Financial Secretary of Hong Kong

The Financial Secretary also said the city offered a stable environment for investors amid a complicated geopolitical landscape. He added that the HK government was also proactively attracting more established mainland enterprises to list in the SAR (Special Administrative Region) to support its overseas expansion plans.

Hong Kong’s stablecoin law takes effect on August 1

🚀 Jack Ma’s ANT International is pursuing stablecoin licenses in Hong Kong & Singapore!

📅 Hong Kong’s new stablecoin regulations take effect this August.

🌏 This MOVE strengthens blockchain infrastructure for cross-border payments and financial innovation in Asia. pic.twitter.com/igFmvHFFj5

— Aivora (@Aivoraex) June 12, 2025

A government announcement earlier this month confirmed that Hong Kong’s new stablecoin law will come into effect on August 1 and pave the way for regulated issuance, positioning the city ahead of the U.S. and mainland China, which continued to take a cautious stance on crypto. The city’s financial and technology sectors were also positioning themselves to use stablecoins in traditional modes of finance. 

The HK Legislative Council passed the bill regulating stablecoins on May 21, but the government did not announce when it WOULD take effect until the June 6 statement. Daniel Tse, Managing Director of Futu Securities International, said investors were becoming increasingly interested in stablecoins, adding that his company’s platform had seen a surge in stablecoin-linked investments. 

Daniel Tse also said his company viewed stablecoins as a promising avenue for growth and innovation in the brokerage industry. He added that clients could trade tokenized intellectual properties or paintings in the future, creating new opportunities for investors and brokers.

Wu Tianhua, founder and CEO of Tiger Brokers, disclosed that his company was very optimistic about the increasing demand for a connection between Web2 and Web3, prompting the development of its one-stop platform. He added that Tiger Brokers had expanded its deposit options to include Bitcoin and Tether’s USDT. The brokerage believes that supporting stablecoin deposits will enhance capital efficiency and flexibility in the market. It also claimed that stablecoins would help reduce foreign exchange in cross-border transactions while improving user experience and fund mobility.

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