Hong Kong Warns of Legal Risks for Unlicensed Stablecoin Issuers as Regulatory Framework Takes Shape

Hong Kong's monetary authority has begun accepting preliminary applications for stablecoin licenses under a new regulatory regime set to take effect in August. The HKMA's phased approach allows issuers to submit initial filings by August 31 for feedback, with full applications due by September 30.

Deputy Chief Executive Darryl Chan indicated licenses will be issued sparingly during the initial rollout, potentially beginning in 2026. The MOVE aligns Hong Kong with other jurisdictions like the EU, where MiCA framework approvals are underway, and the US, where stablecoin providers are adapting to the GENIUS Act.

The city's framework mandates 100% reserve backing with liquid assets, aiming to protect consumers while supporting digital asset market growth. Authorities specifically warned against misleading claims about licensing status, emphasizing enforcement actions against violators.