Hong Kong’s Stablecoin Ordinance Kicks In Tomorrow—6-Month Grace Period for Crypto Players

Hong Kong’s financial regulators drop the hammer—stablecoin rules go live August 1, but there’s a twist.

Transition window: Crypto firms get 180 days to comply with the new ordinance. No last-minute extensions, no ‘we’re decentralized’ excuses.

Why it matters: The city’s bid to tame wildcat stablecoins without strangling innovation. TradFi banks are already drafting their ‘we told you so’ memos.

Bottom line: Another compliance hoop for crypto—but at least Hong Kong’s playing ball while Wall Street still debates whether blockchain is ‘a type of Excel plugin.’

Stablecoin Ordinance kicks in as Hong Kong moves to regulate digital money

The licensing requirements are stringent under the Ordinance. Stablecoins must be backed by high-quality and highly liquid reserves, and issuers are obligated to honor redemption requests within one business day.

Eligible firms must also maintain a physical presence in Hong Kong, meet minimum capital requirements, and demonstrate both viable use cases and sustainable business models.

The HKMA also requires issuers to conduct customer due diligence during issuance and redemption, verifying wallet ownership or control, and using automated transaction monitoring tools to screen wallets.

High-risk wallet addresses must be blacklisted, and suspicious activity must be reported to relevant authorities.

Issuers found violating the licensing terms or regulatory requirements could face a wide array of sanctions. These include fines, public reprimands, license suspensions or revocations, and even criminal referral to law enforcement. The HKMA retains full authority to investigate and penalize non-compliant entities at any point, including those holding temporary or full licenses.

Hong Kong gets plaudits for caution and local ambition

The Stablecoin Ordinance was passed by Hong Kong’s legislature in May 2025. By requiring stablecoin issuers to show tangible economic utility and robust reserves, the HKMA aims to insulate retail investors and financial infrastructure from volatility and systemic risk. Market observers suggest the regulator’s conservative rollout strategy reflects a desire to attract only the most committed and compliant participants.

Only a small number of licenses are expected to be granted in the early phase, with full approvals likely to begin in early 2026. The HKMA has encouraged prospective applicants to express intent and complete submissions by 30 September, though it has not disclosed how many have done so to date.

Major financial and fintech players are already preparing to enter the market. In June, ANT International, a subsidiary of Alibaba’s Ant Group, signaled its intention to apply for a license.

The HKMA’s regulatory clarity could offer long-term advantages for compliant players, particularly as stablecoins become more integrated into payment systems and institutional finance.

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